February 26, 2024

Today’s Mortgage, Refinance Rates: July 21, 2023

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After rising rapidly for most of July, mortgage rates are now back to their lowest levels in three weeks. Average 30-year mortgage rates are now 6.78%, according to Freddie Mac. A week ago, they were just four basis points below 7%.

Mortgage rates fell in response to the latest Consumer Price Index data, which showed inflation slowed significantly in June.

“As inflation slows, mortgage rates declined this week,” said Sam Khater, Freddie Mac’s chief economist. press release. “Still, the continued shortage of previously owned homes for sale is hurting homebuyers looking to take advantage of falling rates. On the other hand, homebuilders have an edge in today’s market, and incoming data shows that homebuilder sentiment continues to rise.”

As rates fall, more optimistic buyers are likely to enter the market. But they will compete with a historically low inventory of homes. If you are planning to buy a home soon, be prepared to make strong offers and don’t be surprised if you have to deal with a lot of rejections before you can accept an offer.

Mortgage Rates Today

Type of mortgage Average rate today
This information is provided by Zillow. See more
mortgage rates on Zillow

Mortgage Refinance Rates Today

Type of mortgage Average rate today
This information is provided by Zillow. See more
mortgage rates on Zillow

Mortgage Calculator

Use our free mortgage calculator to see how today’s interest rates will affect your monthly payments.

Mortgage Calculator

Your estimated monthly payment

  • Paying a 25% a higher down payment would save you $8,916.08 on interest charges
  • Lower the interest rate by 1% you would save $51,562.03
  • Paying extra $500 each month the length of the loan would decrease by 146 months

By clicking “More details,” you’ll also see how much you’ll pay over the entire length of your mortgage, including how much goes toward principal vs. interest.

30 Year Fixed Mortgage Rates

This week’s average 30-year fixed mortgage rate is 6.78%, according to Freddie Mac. This is a decrease of 18 points from the previous week.

The most common type of home loan is the 30-year fixed rate mortgage. With this type of mortgage, you will pay back the amount you borrowed over 30 years, and your interest rate will not change for the life of the loan.

The long 30-year term allows you to spread your payments out over a long period, meaning you can keep your monthly payments lower and more manageable. The trade-off is that you will have a higher rate than you would with shorter terms or adjustable rates.

15 Year Fixed Mortgage Rates

The average 15-year fixed mortgage rate is 6.06% this week, according to Freddie Mac data. This is down 24 basis points from the previous week.

If you want the predictability that comes with a fixed rate but want to spend less on interest over the life of your loan, a 15-year fixed rate mortgage could be right for you. Because these terms are shorter and have lower rates than 30-year fixed rate mortgages, you could save thousands of dollars in interest. However, you will have a higher monthly payment than you would with a longer term.

How Do Feed Rate Increases Affect Mortgages?

The Federal Reserve increased the federal funds rate significantly in an attempt to slow economic growth and get inflation under control. So far, inflation has slowed, but remains above the Fed’s 2% target rate.

Changes in the federal funds rate do not directly affect mortgage rates, but they often go up or down ahead of Fed policy moves. This is because mortgage rates change based on investor demand for mortgage-backed securities, and this demand is often influenced by how investors expect Fed hikes to affect the broader economy.

As inflation begins to fall, so should mortgage rates. But the Fed has signaled that it is waiting for inflation to come down further, which means more rate hikes could be coming this year.

When Will Mortgage Rates Fall?

Mortgage rates rose significantly in 2022 and have been volatile so far in 2023, but are expected to decline later this year.

In June 2023, the Consumer Price Index rose 3% year on year, a significant slowdown compared to the previous month. This is good news for mortgage borrowers and the economy in general.

As inflation comes down, mortgage rates are likely to as well.

For homeowners looking to leverage the value of their home to cover a major 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 top HELOC lenders to start your search for the right loan for you.

A HELOC is a line of credit that allows you to borrow against the equity in your home. It works the same as a credit card in that you borrow the amount you need rather than the full amount you are borrowing as a lump sum. It also allows you to take advantage of the money you have in your home without replacing your entire mortgage, as you would with a cash-out refinance.

Current HELOC rates are relatively low compared to other loan options, including credit cards and personal loans.

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