The average rate offered for a conventional 30-year fixed mortgage dropped to 5.52% from 5.64% the previous business day, moving farther from its recent peak of 6.19%. The average 15-year mortgage rate fell to 4.55% from 4.69% the previous business day. Last month it reached 5.26%, its highest point since at least 2019, and likely much farther back. (Our daily mortgage rate data only goes back to April 2021, but our data on yearly highs and lows dates back to 2020, so we know rates weren’t higher in 2020, and if other measures are any indicator, may have hit their highest points in over a decade recently.) Fixed mortgage rates tend to track the direction of 10-year Treasury yields, which usually rise with heightened inflation fears (and fall when those fears subside). Yields that spiked earlier this year fell this week after lackluster economic data raised the possibility that the Federal Reserve—on a campaign to stem inflation—might not raise its benchmark rate as much or as quickly as expected. During the pandemic, relatively low rates bolstered buying power, allowing house hunters to buy more expensive homes with the same monthly budget and helping to fuel a fiercely competitive residential real estate boom characterized by rapidly rising prices. But now that interest rates are higher, the cost is increasingly putting homes out of reach for prospective buyers. Freddie Mac’s weekly measure of the average 30-year rate is near its highest point since 2009, though it’s still relatively low compared to the double digits of the 1980s and early 1990s. Borrowers pay discount points, or upfront fees, to obtain a lower interest rate, spending more initially to save in the long run. Whether or not you should pay points depends on how long you plan to keep the loan. Here’s how to calculate that.
30-Year Mortgage Rates Drop
A 30-year fixed mortgage is by far the most common type of mortgage because it offers a consistent and relatively low monthly payment. (Shorter-term fixed mortgages have higher payments because the borrowed money is paid back more quickly.) Besides conventional 30-year mortgages, some are backed by the Federal Housing Authority or the Department of Veterans Affairs. FHA loans offer borrowers with lower credit scores or a smaller down payment a better deal than they might otherwise get; VA loans let current or past members of the military and their families skip a down payment.
30-year fixed: The average rate fell to 5.52%, down from 5.64% the previous business day. A week ago, it was 5.93%. For every $100,000 borrowed, monthly payments would cost about $569.04, or $26.02 less than a week ago.30-year fixed (FHA): The average rate fell to 5.32%, down from 5.59% the previous business day. A week ago, it was 5.87%. For every $100,000 borrowed, monthly payments would cost about $556.55, or $34.67 less than a week ago.30-year fixed (VA): The average rate fell to 5.26% from 5.43% the previous business day. A week ago, it was 5.82%. For every $100,000 borrowed, monthly payments will cost about $552.82, or $35.21 less than a week ago.
15-Year Mortgage Rate Falls
The major advantage of a 15-year fixed mortgage is that it offers a lower interest rate than the 30-year and you’re paying off your loan more quickly, so your total borrowing costs are far lower. But for the same reason—that the loan is paid back over a shorter time frame—the monthly payments will be higher.
15-year fixed: The average rate fell to 4.55%, down from 4.69% the previous business day. A week ago, it was 4.95%. For every $100,000 borrowed, monthly payments would cost about $767.55, or $20.64 less than a week ago.
Jumbo Mortgage Rates Decline
Jumbo loans, which allow you to borrow bigger amounts for more expensive properties, tend to have slightly higher interest rates than loans for more standard amounts. Jumbo means over the limit that Fannie Mae and Freddie Mac are willing to buy from lenders, and that limit went up in 2022. For a single-family home, it’s now $647,200 (except in Hawaii, Alaska, and a few federally designated high-cost markets, where the limit is $970,800).
Jumbo 30-year fixed: The average rate fell to 4.65% from 4.77% the previous business day. A week ago, it was 5.02%. For every $100,000 borrowed, monthly payments would cost about $515.64, or $22.40 less than a week ago.Jumbo 15-year fixed: The average rate fell to 4.65% from 4.77%, the previous business day. A week ago, it was 5.02%. For every $100,000 borrowed, monthly payments would cost about $772.68, or $19.16 less than a week ago.
Refinance Rates Are Down
Refinancing an existing mortgage tends to be slightly more expensive than getting a new one, especially in a low-rate environment.
30-year fixed: The average rate to refinance fell to 5.81% from 5.96% the previous business day. A week ago, it was 6.28%. For every $100,000 borrowed, monthly payments would cost about $587.39, or $30.28 less than a week ago.15-year fixed: The average rate to refinance fell to 4.90% from 4.99% the previous business day. A week ago, it was 5.20%. For every $100,000 borrowed, monthly payments would cost about $785.59, or $15.66 less than a week ago.
Methodology
Our rates for “today” reflect national averages provided by more than 200 of the country’s top lenders one business day ago, and the “previous” is the rate provided the business day before that. Similarly, the week earlier references compare the data from five business days earlier (so bank holidays are excluded.) The rates assume a loan-to-value ratio of 80% and a borrower with a FICO credit score of 700 to 759—within the “good” to “very good” range. They’re representative of the rates customers would see in actual quotes from lenders, based on their qualifications, and may vary from advertised teaser rates. Have a question, comment, or story to share? You can reach Diccon at dhyatt@thebalance.com. Want to read more content like this? Sign up for The Balance’s newsletter for daily insights, analysis, and financial tips, all delivered straight to your inbox every morning!
