Here are the mortgage rates for March 15, 2023: Rates slide

A variety of notable mortgage rates have dropped over the past seven days. Average interest rates on both 15-year fixed and 30-year fixed mortgages declined. At the same time, average interest rates for 5/1 adjustable rate mortgages also fell.

After nearly a year of rising mortgage rates, borrowers finally saw some relief late last year. Rates have declined since peaking in late 2022, although current rates remain nearly double what they were during the pandemic’s record low rate environment.

Inflation and the Fed’s series of rate hikes in 2022 in an effort to curb it have partly contributed to the rise in mortgage rates. Mortgage rates hit a 20-year high at the end of 2022, but now the macroeconomic environment is changing again.

Headline inflation remains high but has slowly but steadily declined each month since peaking in June 2022. The Fed’s decision to raise the federal funds rate by 0.25% on Feb. 1 after its last meeting — the smallest increase from March 2022 — suggests that inflation may be easing and the central bank may be able to ease its rate hikes.

What does this mean for home buyers this year? Mortgage rates are likely to ease slightly in 2023, although they are highly unlikely to return to the lows of 2020 and 2021. However, interest rate volatility may continue for some time. “Expect mortgage rates to yo-yo up and down in the first half of the year, at least until there’s a consensus on when the Fed will finish raising rates,” says Greg McBride, CFA and chief financial analyst at Bankrate . (Like CNET Money, Bankrate is owned by Red Ventures.) McBride expects interest rates to fall more steadily as the year progresses. “Thirty-year fixed mortgage rates will end the year close to 5.25%,” he predicts.

Instead of worrying about market mortgage rates, homebuyers should focus on what they can control: getting the best rate they can for their situation. Take steps to improve your credit score and save for a down payment to increase your chances of qualifying for the lowest interest rate available. Also, be sure to compare rates and fees from multiple lenders to get the best deal. Looking at the annual percentage rate, or APR, will show you the total cost of borrowing and help you compare apples to apples.

30 year fixed rate mortgages

The average 30-year fixed mortgage rate is 6.96%, down 15 basis points from last week. (One basis unit equals 0.01%). The most commonly used loan term is a 30-year fixed mortgage. A 30-year fixed rate mortgage typically has a higher interest rate than a 15-year fixed rate mortgage — but also a lower monthly payment. Although you’ll pay more interest over time — paying off your loan over a longer period of time — if you’re looking for a lower monthly payment, a 30-year fixed mortgage may be a good option.

15 year fixed rate mortgages

The average interest rate for a 15-year fixed mortgage is 6.27%, down 3 basis points from seven days ago. Compared to a 30-year fixed mortgage, a 15-year fixed mortgage with the same loan value and interest rate will have a higher monthly payment. However, as long as you are able to afford the monthly payments, there are many benefits to a 15-year loan. These usually include being able to get a lower interest rate, paying off your mortgage sooner and paying less overall interest over the long term.

5/1 adjustable rate mortgages

A 5/1 ARM has an average interest rate of 5.80%, down 7 basis points from the same period last week. You’ll typically get a lower interest rate (compared to a 30-year fixed mortgage) with a 5/1 adjustable rate mortgage for the first five years of the mortgage. However, you may end up paying more after that, depending on the terms of your loan and how the interest rate changes with the market rate. Because of this, an ARM can be a good option if you plan to sell or refinance your home before the price changes. If not, changes in the market could push the rate up significantly.

Mortgage interest rate trends

Mortgage rates were historically low for most of 2020 and 2021, but rose steadily throughout 2022. The Federal Reserve raised its target federal funds rate — which affects the cost of most consumer loans, including mortgages — seven times by 2022 in an effort to curb record inflation. Although the Fed does not directly control mortgage rates, higher inflation and a higher federal funds rate tend to lead to higher mortgage rates.

The Fed’s latest 0.25% hike — smaller than its previous six hikes of 0.75% or 0.5% — represents a shift in the Fed’s stance and suggests the central bank may be less aggressive in rate hikes in 2023 if inflation continues to come down. But inflation is still far from the Fed’s 2% target range, and Fed officials have repeatedly said (PDF) that additional — albeit smaller — rate hikes will be required. Overall, while we may see mortgage rates gradually decline this year, borrowers should not expect a sharp drop or a return to pandemic lows.

We use data collected by Bankrate, which is owned by the same parent company as CNET, to track changes in interest rates over time. This table summarizes the average interest rates offered by lenders across the country:

Today’s mortgage rates

Prices from March 15, 2023.

How to find the best mortgage rates

To find a personalized mortgage rate, meet with your local mortgage broker or use an online mortgage service. To find the best home loan, you should consider your goals and current finances.

Things that affect the mortgage rate you can get include: your credit score, down payment, loan-to-value ratio, and debt-to-income ratio. In general, you want a good credit score, a larger down payment, a lower DTI, and a lower LTV to get a lower interest rate.

The interest rate isn’t the only factor that affects the cost of your home. Also be sure to consider additional factors such as fees, closing costs, taxes and discount points. You should shop around with multiple lenders — including credit unions and online lenders in addition to local and national banks — to get a mortgage that’s best for you.

What is a good loan term?

An important thing to consider when choosing a mortgage is the loan term or payment schedule. The most commonly offered loan terms are 15 years and 30 years, although you can also find 10, 20 and 40 year mortgages. Home loans are further divided into fixed and adjustable rate home loans. Interest rates on a fixed rate mortgage are the same for the life of the loan. For adjustable-rate mortgages, interest rates are set for a certain number of years (usually five, seven or 10 years), then the interest rate is adjusted annually based on the market rate.

One factor to consider when deciding between a fixed and adjustable rate mortgage is how long you plan to live in your home. For people who plan to live in a new home for the long term, fixed rate mortgages may be the best option. While adjustable rate mortgages may offer lower interest rates up front, fixed rate mortgages are more stable in the long run. However, you may get a better deal with an adjustable-rate mortgage if you only plan to keep your home for a few years. The best loan term depends on your specific situation and goals, so be sure to consider what’s important to you when choosing a mortgage.

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