Today’s Mortgage Refinance Rates: January 22, 2023

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Mortgage rates rose in early January but have eased in recent weeks. Average 30-year fixed rates are now at 6.15%, according to Freddie Mac. Average 15-year fixed rates also fell to 5.28%, the lowest rate since mid-September.

Rates are expected to fall in 2023 as the Federal Reserve eases its fight against inflation. The Fed does not directly influence mortgage rates, but they often tend to rise or fall based on how investors expect the Fed’s moves to affect the broader economy.

Mortgage rates today

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

Mortgage refinance rates today

Type of mortgage Average rate today
This information was 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

  • Payment a 25% a higher payment would save you $8,916.08 at the expense of interest
  • Interest rate reduction for 1% would save you $51,562.03
  • Additional payment 500 dollars every month would reduce the length of the loan by 146 months

By clicking on More Details, you’ll also see how much you’ll pay over the life of the mortgage, including how much goes toward principal versus interest.

30-year fixed mortgages

The current average 30-year fixed mortgage rate is 6.15%, according to Freddie Mac. This is a decrease from the previous week.

A 30-year fixed-rate mortgage is the most common type of home loan. With this type of mortgage, you’ll pay back what you borrow over 30 years, and your interest rate won’t change over the life of the loan.

A long term of 30 years allows you to spread your payments over a longer period of time, 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 mortgages

The average 15-year fixed mortgage rate is 5.28%, down from the previous week, according to data from Freddie Mac.

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 may be right 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 will have a higher monthly payment than you would in the long run.

How do Fed rate hikes affect mortgages?

The Federal Reserve is raising the federal funds rate to try to slow economic growth and bring inflation under control. So far, inflation has slowed somewhat, but remains well above the Fed’s 2% target rate.

Mortgage rates are not directly affected by changes in the federal funds rate, but they often trend up or down ahead of the Fed’s policy moves. That’s 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 decline, so should mortgage rates. But the Fed has signaled it is watching for persistent signs of slowing inflation and won’t stop raising rates anytime soon – although it may start opting for smaller increases at its next few meetings.

When will mortgage rates fall?

Mortgage rates rose dramatically in 2022, but have begun to decline in the past few months.

In December 2022, the Consumer Price Index rose 6.5% year over year, a significant slowdown from the previous month. This is good news for mortgage borrowers and the wider economy.

As inflation declines, mortgage rates are likely to as well. But the Fed is looking for sustained signs of slowing inflation, meaning it is unlikely to stop raising rates anytime soon, although officials have said they expect to begin slowing the pace of increases. This should help ease upward pressure on mortgage rates.

Are HELOCs a good idea right now?

Many homeowners have built up a lot of equity over the past few years as home prices have risen at an unprecedented rate. But because rates are so high now, using that capital can be expensive.

For homeowners looking to use their home’s value to cover a major purchase — such as a home renovation — a home equity line of credit (HELOC) can still be a good option.

A HELOC is a line of credit that allows you to borrow against the equity in your home. It works much like a credit card in that you borrow what you need instead of getting the full amount you borrow in a lump sum.

Depending on your finances and the type of HELOC you get, you may be able to get a better rate with a HELOC than you would with a home equity loan or cash out refinance. Just keep in mind that HELOC rates are variable, so if rates start to rise further, yours will likely increase as well.

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