Today’s best mortgage deal? 15-year terms remain today’s lowest rates | April 19, 2023

Based on data compiled by Credible, mortgage rates for home purchases have risen for two key terms, fallen for one term, and remained steady for another since yesterday.

Rates last updated on April 19, 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 have edged down for 30-year terms and hit 6.25%, while rates for 20-year terms have edged up to 6.375%. Rates for 10-year terms are edging closer to 6%, barely staying below at 5.99%. Meanwhile, rates for 15-year terms have not only held steady, but are today’s lowest rate at 5.625%. Homebuyers looking to maximize their savings on interest should consider 15-year terms. Borrowers who would rather have a smaller monthly payment should instead consider 30-year terms.

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 two key terms, while two held steady since yesterday.

Rates last updated on April 19, 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 have continued to climb for 15- and 30-year terms, as the rates for the two terms have edged up to 5.625% and 6.25%, respectively. Meanwhile, rates for both 10- and 20-year terms have held steady at 5.875%. Homeowners who would like to refinance into a smaller monthly payment should consider 20-year terms, as their rates are over a quarter of a percentage point lower than those for 30-year terms. Homeowners who would rather save the most on interest should consider today’s lowest rate, 15-year terms.

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 or refinance, 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 700 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.

Why do mortgage rates fluctuate?

Here are some of the most common reasons why mortgage rates move frequently:

Employment patterns

The employment rate is an indicator of demand for mortgages. When more people are unemployed, fewer people will be looking to get a mortgage and buy a home — and that lower demand will push interest rates down. When the employment rate improves, demand for mortgages will likely keep pace. And as demand for mortgages rises, so will mortgage interest rates.

The bond market

Because bonds are a lower-risk type of investment, demand for bonds can increase when investors are wary of other investment vehicles, or fearful of the overall state of the economy. Increased demand for bonds causes their price to rise and their earnings — called their yield — to fall.

When bond yields fall, consumer interest rates generally do as well, including mortgage interest rates. When investors feel more confident about the economy, demand for bonds declines, bond prices drop and yields rise. And interest rates tend to follow.

Federal Reserve System

“The Fed,” as it’s commonly called, is the United States’ central bank. But it doesn’t actually set mortgage rates. Rather, multiple things the Fed does influence mortgage rates. For example, while mortgage rates don’t mirror the Fed funds rate — the rate banks apply when borrowing lending money to each other overnight — they do tend to follow it. If that rate rises, mortgage rates typically rise in tandem.

Global economy

Global banking systems and economies are closely interconnected. When economies in other parts of the world — especially Europe and Asia — experience a downturn, it affects investors and financial institutions in the United States. And, when foreign economies are doing well, they may attract more American investors — and divert those investment dollars out of the U.S. economy.

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 and see prequalified rates in just a few minutes.

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