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Mortgage rates appear to be bearing the brunt of the Federal Reserve's aggressive hikes to the federal funds rate. Ever since the Fed started raising rates in early 2022, mortgage rates have skyrocketed.
This means hopeful homebuyers are at the mercy of the Fed, and might not see substantial improvement in mortgage affordability until the central bank starts cutting rates.
Average 30-year mortgage rates continued to climb this week, reaching a new high of 7.63%, according to Freddie Mac. Average 15-year mortgage rates also inched up, and threaten to topple 7% for the first time in 23 years.
In a speech at the Economic Club of New York on Thursday, Fed Chair Jerome Powell noted that while significant progress has been made toward getting inflation down to an acceptable level, price growth is still running too high.
This means that rate cuts probably aren't coming anytime soon, as "a few months of good data are only the beginning of what it will take to build confidence that inflation is moving down sustainably toward our goal," Powell said. He also said that future rate hikes aren't off the table if the economy starts to heat up again.
Markets generally believe the Fed could start cutting rates as soon as July of next year, according to the CME FedWatch Tool. This means that borrowers getting a mortgage later on in 2024 will likely be able to do so in much more favorable conditions than those currently going through the process.
Current Mortgage Rates
Current Refinance Rates
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Use our free mortgage calculator to see how today's mortgage rates would impact your monthly payments. By plugging in different rates and term lengths, you'll also understand how much you'll pay over the entire length of your mortgage.
Click "More details" for tips on how to save money on your mortgage in the long run.
Mortgage Rates for Buying a Home
30-Year Fixed Mortgage Rates Increase (+0.38%)
The current average 30-year fixed mortgage rate is 7.72%, up 38 basis points since this time last week. This rate is up nearly a full percentage point compared to a month ago, when it was 6.89%.
At 7.72%, you'll pay $714 monthly toward principal and interest for every $100,000 you borrow.
The 30-year fixed-rate mortgage is the most common type of home loan. With this type of mortgage, you'll pay back what you borrowed over 30 years, and your interest rate won't change for the life of the loan.
20-Year Fixed Mortgage Rates Go Up (+0.43%)
The average 20-year fixed mortgage rate is up 43 basis points from last week and sits at 7.46%. This time in September, the rate was 6.79%.
With a 7.46% rate on a 20-year term, your monthly payment will be $803 toward principal and interest for every $100,000 borrowed.
A 20-year term isn't as common as a 30-year or 15-year term, but plenty of mortgage lenders still offer this option.
15-Year Fixed Mortgage Rates Up a Bit (+0.21%)
The average 15-year mortgage rate is 6.77%, an increase from last week. It's also up from this time last month, when it was 6.29%.
With a 6.77% rate on a 15-year term, you'll pay $886 each month toward principal and interest for every $100,000 borrowed.
If you want the predictability that comes with a fixed rate but are looking to spend less on interest over the life of your loan, a 15-year fixed-rate mortgage might be a good fit for you. Because these terms are shorter and have lower rates than 30-year fixed-rate mortgages, you could potentially save tens of thousands of dollars in interest. However, you'll have a higher monthly payment than you would with a longer term.
7/1 ARM Rates Spike (+1.11%)
The 7/1 adjustable mortgage rate is up a whopping 1.11 percentage points from last week, currently at 7.85%. This rate has been pretty volatile in recent weeks. But it hasn't changed as much on a monthly basis, and was 7.62% a month ago.
At 7.85%, your monthly payment would be $723 toward principal and interest for every $100,000 borrowed — but only for the first seven years. After that, your payment would increase or decrease annually depending on the new rate.
5/1 ARM Rates Jump Up (+0.45%)
The average 5/1 ARM rate is 7.52%, a 45-point increase from last week. This time in September, this rate was a bit higher at 7.23%.
Here's how a 7.52% rate would affect you for the first five years: You'd pay $701 per month toward principal and interest for every $100,000 you borrow.
30-year FHA Rates Remain Flat (No Change)
The average 30-year FHA interest rate is 6.75% today, which is exactly where it was a week ago. This rate was 6.04% this time last month.
At 6.75%, you would pay $649 monthly toward principal and interest for every $100,000 borrowed.
FHA mortgages are good choices if you don't qualify for a conforming mortgage. You'll need a 3.5% down payment and 580 credit score to qualify.
30-year VA Rates Increase to Nearly 7% (+0.37%)
The current VA mortgage rate is 6.91%, 37 basis points up from this time last week. VA rates have so far managed to stay below 7%, but that may change soon. This rate was 6.11% this time last month.
With a 6.91% rate, your monthly payment would be $659 toward principal and interest for every $100,000 you borrow.
Mortgage Refinance Rates
30-Year Fixed Refinance Rates Inch Up (+0.17%)
The average 30-year refinance rate is 7.79%, which is a bit higher than it was last week. It's up significantly compared to a month ago, when it was 7.17%.
Here's how a 7.79% rate would affect your monthly payments: You'd pay $719 toward principal and interest for every $100,000 borrowed.
Refinancing into a 30-year term can land you lower monthly payments, but you'll ultimately pay more by refinancing into a longer term.
20-Year Fixed Refinance Rates are a Bit Higher (+0.24%)
The current 20-year fixed refinance rate is 7.37%, which is up compared to a week ago. This rate was 6.92% this time in September.
A 7.37% rate on a 20-year term will result in a $798 monthly payment toward principal and interest for every $100,000 you borrow.
15-Year Fixed Refinance Rates Inch Down (-0.04%)
The average 15-year fixed refinance rate is 6.80%, which is a tiny bit lower than it was it was last week. But this rate is up compared to this time in September, when it was at 6.50%.
A 6.80% rate on a 15-year term means you'll pay $888 each month toward principal and interest for every $100,000 borrowed.
Refinancing into a 15-year term can save you money in the long run, because you'll get a lower rate and pay off your mortgage faster than you would with a 30-year term. But it could result in higher monthly payments.
7/1 ARM Refinance Rates Fall (-0.21%)
The average 7/1 ARM refinance rate is 7.36%, down from this time last week. A month ago, it was much higher at 7.97%.
Refinancing into a 7/1 ARM with a 7.36% rate means your monthly payment toward principal and interest will be $690 for every $100,000 you borrow. This will be the payment for the first seven years, then your rate will change annually unless you refinance again.
5/1 ARM Refinance Rates Essentially Flat (+0.01%)
The 5/1 ARM refinance rate is 7.61%, up a single basis point from last week. It's up from this time last month, when it was 7.27%.
A 7.61% rate will result in a monthly payment of $707 toward principal and interest for every $100,000 borrowed. You'll pay this amount for the first five years of your new mortgage.
30-Year FHA Refinance Rates Hold Steady (No Change)
The 30-year FHA refinance rate is 6.50%, which is flat compared to last week. This rate was 5.92% this time last month.
A 6.50% refinance rate would lead to a $632 monthly payment toward the principal and interest per $100,000 borrowed.
30-Year VA Refinance Rates Barely Go Up (+0.08%)
The average 30-year VA refinance rate is 7.13%, which is up a little bit from last week. This rate was 6.34% a month ago.
At 7.13%, your new monthly payment would be $674 toward principal and interest for every $100,000 you borrow.
Are Mortgage Rates Going Down?
Mortgage rates started ticking up from historic lows in the second half of 2021 and increased over three percentage points in 2022. Mortgage rates have been volatile so far in 2023, and they're higher than they were in October 2022.
As inflation starts to come down, mortgage rates will recede somewhat as well. If we experience a recession, rates may drop a little faster. But average 30-year fixed rates will likely remain somewhere in the 7% to 8% range in the near term.
For homeowners looking to leverage their home's value to cover a big purchase — such as a home renovation — a home equity line of credit (HELOC) may be a good option while we wait for mortgage rates to ease. Check out some of our best HELOC lenders to start your search for the right loan for you.
A HELOC is a line of credit that lets you borrow against the equity in your home. It works similarly to a credit card in that you borrow what you need rather than getting the full amount you're borrowing in a lump sum. It also lets you tap into the money you have in your home without replacing your entire mortgage, like you'd do with a cash-out refinance.
Current HELOC rates are relatively low compared to other loan options, including credit cards and personal loans.