Today’s 15-year mortgage rates continue to offer best money-saving opportunity | Jan. 27, 2023
Mortgage rates rise across the board, but 15-year terms continue to offer the opportunity for a relatively low rate and smaller monthly payments
Based on data compiled by Credible, mortgage rates for home purchases have risen across all terms since yesterday.
- 30-year fixed mortgage rates: 6.625%, up from 6.500%, +0.125
- 20-year fixed mortgage rates: 6.500%, up from 6.375%, +0.125
- 15-year fixed mortgage rates: 6.250%, up from 6.125%, +0.125
- 10-year fixed mortgage rates: 6.625%, up from 6.375%, +0.250
Rates last updated on Jan. 27, 2023. These rates are based on the assumptions shown here. Actual rates may vary. Credible, a personal finance marketplace, has 5,000+ Trustpilot reviews with an average star rating of 4.7 (out of a possible 5.0).
What this means: Mortgage rates edged up across all terms today, with 10-year rates rising a quarter of a percentage point to hit 6.625%. Still, homebuyers who want a low interest rate and manageable monthly payment should consider a 15-year term: rates for this mid-length repayment term are more than a quarter of a point lower than rates for a 30-year mortgage. Comparing rates from multiple lenders can help buyers find the best possible deal for their unique financial situation.
To find great mortgage rates, start by using Credible’s secured website, which can show you current mortgage rates from multiple lenders without affecting your credit score. You can also use Credible’s mortgage calculator to estimate your monthly mortgage payments.
Based on data compiled by Credible, mortgage refinance rates have risen for three key terms and remained unchanged for one term since yesterday.
- 30-year fixed-rate refinance: 6.750%, up from 6.500%, +0.250
- 20-year fixed-rate refinance: 6.375%, up from 6.125%, +0.250
- 15-year fixed-rate refinance: 6.125%, up from 6.000%, +0.125
- 10-year fixed-rate refinance: 6.250%, unchanged
Rates last updated on Jan. 27, 2023. These rates are based on the assumptions shown here. Actual rates may vary. With 5,000 reviews, Credible maintains an "excellent" Trustpilot score.
What this means: Mortgage refinance rates rose for three key terms today, except for 10-year rates, which held steady. With today’s rate changes, homeowners looking to refinance may want to consider 15-year terms, which remain the lowest available at 6.125%. But homeowners who want to refinance into a longer repayment term will find greater interest savings with 20-year rates, which are more than a quarter of a percentage point lower than rates for a 30-year term.
How mortgage rates have changed over time
Today’s mortgage interest rates are well below the highest annual average rate recorded by Freddie Mac — 16.63% in 1981. A year before the COVID-19 pandemic upended economies across the world, the average interest rate for a 30-year fixed-rate mortgage for 2019 was 3.94%. The average rate for 2021 was 2.96%, the lowest annual average in 30 years.
The historic drop in interest rates means homeowners who have mortgages from 2019 and older could potentially realize significant interest savings by refinancing with one of today’s lower interest rates. When considering a mortgage refinance or purchase, it’s important to take into account closing costs such as appraisal, application, origination and attorney’s fees. These factors, in addition to the interest rate and loan amount, all contribute to the cost of a mortgage.
How Credible mortgage rates are calculated
Changing economic conditions, central bank policy decisions, investor sentiment and other factors influence the movement of mortgage rates. Credible average mortgage rates and mortgage refinance rates reported in this article are calculated based on information provided by partner lenders who pay compensation to Credible.
The rates assume a borrower has a 740 credit score and is borrowing a conventional loan for a single-family home that will be their primary residence. The rates also assume no (or very low) discount points and a down payment of 20%.
Credible mortgage rates reported here will only give you an idea of current average rates. The rate you actually receive can vary based on a number of factors.
How much can I borrow for a mortgage?
It’s critical to have an idea of how much you can afford to borrow for a mortgage before you begin home shopping or make an offer on a house.
Generally, the 28/36 rule is a good measure of how much you can afford to borrow without strapping your finances. The rule states that your mortgage payment, including taxes and insurance, shouldn’t be more than 28% of your gross monthly income. And all your debts, including your mortgage and other monthly expenses like car and student loan payments, shouldn’t exceed 36% of your gross monthly income.
For example, if your gross monthly income is $6,250 (annual salary of $75,000), you should be able to afford a monthly payment of $1,750. And your total monthly debt load shouldn’t exceed $2,250.
A general rule of thumb is that you shouldn’t take out a mortgage that’s two to two and half times your gross annual income. So in the above scenario, the maximum you should borrow to buy a house would be $187,500.
Ultimately, lenders determine how much you can afford to borrow by weighing your income, debt, assets, credit and other financial factors.
If you’re trying to find the right mortgage rate, consider using Credible. You can use Credible's free online tool to easily compare multiple lenders in just a few minutes.
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