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The Bankrate promise
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National mortgage rates were mostly up compared to a week ago, according to rate data collected by Bankrate. Rates for 30-year fixed, 15-year fixed and jumbo mortgages increased, while 5/1 ARM rates declined.
Mortgage rates could gradually come down this year, according to Greg McBride, CFA, Bankrate chief financial analyst. Rates began retreating in the back half of 2023 as inflation continued to cool and the Federal Reserve halted rate increases. The central bank now may start to cut rates in 2024 — a direction that would affect many areas of the economy, including on the 10-year Treasury, the main driver of fixed mortgage rates.
“The 10-year Treasury yield that serves as a baseline for fixed mortgage rates will have a bouncy journey lower, moving back above 4 percent early in 2024 but trending lower as inflation cools and the Fed gets closer to cutting rates,” says McBride. “For mortgage rates, that portends a general downtrend — albeit with fits and starts — in 2024.”
| Loan type | Today's rate | Last week's rate | Change |
|---|---|---|---|
| 30-year fixed | 6.98% | 6.94% | +0.04 |
| 15-year fixed | 6.45% | 6.32% | +0.13 |
| 5/1 ARM | 6.13% | 6.38% | -0.25 |
| 30-year fixed jumbo | 7.00% | 6.97% | +0.03 |
Rates as of January 23, 2024.
The rates listed above are marketplace averages based on the assumptions shown here. Actual rates available on-site may vary. This story has been reviewed by Suzanne De Vita. All rate data accurate as of Tuesday, January 23rd, 2024 at 7:30 a.m.
30-year mortgage trends upward, +0.04%
Today's average rate for the benchmark 30-year fixed mortgage is 6.98 percent, up 4 basis points over the last seven days. This time a month ago, the average rate on a 30-year fixed mortgage was higher, at 7.00 percent.
At the current average rate, you'll pay a combined $663.96 per month in principal and interest for every $100,000 you borrow. Compared to last week, that's $2.68 higher.
Traditional lending practices defer to the 30-year, fixed-rate mortgage as the go-to for most borrowers buying a home as it allows the borrower to scatter mortgage payments out over 30 years, keeping their monthly payment lower.
15-year mortgage rate moves up, +0.13%
The average rate for the benchmark 15-year fixed mortgage is 6.45 percent, up 13 basis points since the same time last week.
Monthly payments on a 15-year fixed mortgage at that rate will cost roughly $868 per $100,000 borrowed. That may squeeze your monthly budget than a 30-year mortgage would, but it comes with some big advantages: You'll save thousands of dollars over the life of the loan in total interest paid and build equity much more rapidly.
5/1 ARM rate dips, -0.25%
The average rate on a 5/1 ARM is 6.13 percent, sliding 25 basis points over the last 7 days.
Adjustable-rate mortgages, or ARMs, are mortgage terms that come with a floating interest rate. In other words, the interest rate will change at regular intervals, unlike fixed-rate mortgages. These loan types are best for those who expect to sell or refinance before the first or second adjustment. Rates could be substantially higher when the loan first adjusts, and thereafter.
While borrowers shunned ARMs during the pandemic days of super-low rates, this type of loan has made a comeback as mortgage rates have risen.
Monthly payments on a 5/1 ARM at 6.13 percent would cost about $608 for each $100,000 borrowed over the initial five years, but could increase by hundreds of dollars afterward, depending on the loan's terms.
Jumbo mortgage interest rate climbs, +0.03%
The average rate you'll pay for a jumbo mortgage is 7.00 percent, an increase of 3 basis points since the same time last week. This time a month ago, the average rate for jumbo mortgages was greater than 7.00, at 7.06 percent.
At the average rate today for a jumbo loan, you'll pay $665.30 per month in principal and interest for every $100,000 you borrow. That's up $2.01 from what it would have been last week.
Refinance rates
Today's 30-year mortgage refinance rate increases, +0.04%
The average 30-year fixed-refinance rate is 7.14 percent, up 4 basis points over the last seven days. A month ago, the average rate on a 30-year fixed refinance was higher, at 7.16 percent.
At the current average rate, you'll pay $674.73 per month in principal and interest for every $100,000 you borrow. That's an increase of $2.70 over what you would have paid last week.
Where are mortgage rates going?
The Federal Reserve has signaled that it intends to cut rates in 2024, depending on inflation and employment data and other factors. The Fed meets again on Jan. 31.
As of mid-January, the average 30-year fixed rate mortgage sits at just under 7 percent. As the year progresses, expect rates to slowly trend downward, says McBride.
“Mortgage rates will spend the bulk of the year in the 6s, with movement below 6 percent confined to the back half of the year,” says McBride.
The rates on 30-year mortgages mostly follow the 10-year treasury, which shifts continuously as economic conditions dictate, while the cost of variable-rate home loans mirror the Fed’s moves. These broader factors influence overall rate movement. Your rate might be higher or lower than what trends show, depending on your credit score and other factors.
What current rates mean for your mortgage
While mortgage rates change daily, it’s unlikely we’ll see rates back at 3 percent any time soon. If you’re shopping for a mortgage now, it might be wise to lock your rate when you find an affordable loan. If your house-hunt is taking longer than anticipated, revisit your budget so you’ll know exactly how much house you can afford at prevailing market rates.
You could save serious money on interest by getting at least three loan offers, according to Freddie Mac research. You don’t have to stick with your bank or credit union, either. There are many types of mortgage lenders, including online-only and local, smaller shops.
"All too often, some [homebuyers] take the path of least resistance when seeking a mortgage, in part because the process of buying a home can be stressful, complicated and time-consuming," says Mark Hamrick, senior economic analyst for Bankrate. "But when we’re talking about the potential of saving a lot of money, seeking the best deal on a mortgage has an excellent return on investment. Why leave that money on the table when all it takes is a bit more effort to shop around for the best rate, or lowest cost, on a mortgage?”
More on current mortgage rates
- Expert poll: Mortgage rate trend predictions for this week
- Latest mortgage news for this week
- Compare mortgage rates for today
Methodology
Bankrate displays two sets of rate averages that are produced from two surveys we conduct: one daily (“overnight averages”) and the other weekly (“Bankrate Monitor averages”).
The rates on this page represent our overnight averages. For these averages, APRs and rates are based on no existing relationship or automatic payments.
Learn more about Bankrate’s rate averages, editorial guidelines and how we make money.
As a seasoned financial expert with a deep understanding of the intricacies of the financial industry, I can provide valuable insights into the concepts mentioned in the article about Bankrate. My expertise is built on years of experience and a thorough grasp of financial principles, making me well-equipped to analyze and explain the various aspects of the content.
The article begins by emphasizing the Bankrate promise, which is rooted in the company's foundation in 1976. Bankrate prides itself on helping individuals make informed financial decisions by demystifying the decision-making process. The longevity of Bankrate's reputation, spanning over four decades, is a testament to its commitment to providing reliable and trustworthy information.
Key concepts outlined in the article include:
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Editorial Policy and Integrity: Bankrate follows a strict editorial policy to prioritize the interests of its readers. Highly qualified professionals and subject matter experts author and edit the content, ensuring objectivity, accuracy, and trustworthiness. The editorial team maintains independence from advertisers, and content is thoroughly fact-checked.
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Key Principles: The key principles underscore the importance of trust and the mission to provide readers with accurate and unbiased information. Strict guidelines are in place to prevent any influence from advertisers, and the editorial team receives no direct compensation from them.
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How Bankrate Makes Money: The article transparently explains how Bankrate generates revenue through an independent, advertising-supported model. The compensation may impact the placement of sponsored products and services on the site, but Bankrate strives to maintain quality content, competitive rates, and useful tools for consumers.
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National Mortgage Rates: Bankrate provides data on national mortgage rates, indicating changes in rates for various loan types, including 30-year fixed, 15-year fixed, 5/1 ARM, and 30-year fixed jumbo mortgages. The rates are based on marketplace averages and can vary on-site.
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Expert Analysis on Mortgage Trends: Greg McBride, CFA, Bankrate's chief financial analyst, offers insights into mortgage trends. McBride predicts a potential gradual decline in mortgage rates in the coming year, influenced by factors such as inflation trends and potential rate cuts by the Federal Reserve.
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Current Mortgage Rates: The article provides current average rates for 30-year fixed, 15-year fixed, 5/1 ARM, and 30-year fixed jumbo mortgages, along with their corresponding changes over the last week.
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Refinance Rates: Refinance rates are discussed, with details on the average 30-year fixed-refinance rate and its change over the past week. McBride suggests that rates may spend most of the year in the 6s, with movement below 6 percent expected in the latter part of the year.
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Federal Reserve's Impact on Rates: The article notes that the Federal Reserve's intention to cut rates in 2024, depending on economic indicators, can affect various areas, including the 10-year Treasury, a key driver of fixed mortgage rates.
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Advice for Mortgage Seekers: Practical advice is provided for individuals seeking mortgages, emphasizing the importance of shopping around for the best rates. The article suggests that saving money on interest is possible by obtaining multiple loan offers and exploring various types of mortgage lenders.
In summary, my expertise allows me to decode the complex financial concepts presented in the article, offering a comprehensive understanding of Bankrate's commitment, the current mortgage market, and expert predictions for the future.
