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See mortgage rates for 1 March 2023, which are largely unchanged from yesterday. (Reliable)
Based on data compiled by Credible, mortgage rates for home purchases fell for one key term and were unchanged for three other terms as of yesterday.
Prices were last updated on March 1, 2023. These prices are based on the assumptions shown here. Actual prices 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 does this mean: Homebuyer mortgage rates fell today for 15-year rates, while rates for all other terms remained steady. Borrowers who want a lower monthly mortgage payment may want to consider 30-year rates, which remain flat for three consecutive days. But borrowers looking to minimize interest costs will find greater interest savings with 10- or 15-year rates. Buyers may want to lock in a low interest rate today, while rates on all repayment terms are still below 7%.
To find great mortgage rates, start by using Credible’s secure 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 calculate your monthly mortgage payments.
Based on data collected by Credible, mortgage refinance rates they rose for one key period and were unchanged for three more terms as of yesterday.
Prices were last updated on March 1, 2023. These prices are based on the assumptions shown here. Actual prices may vary. With 5,000 reviews, Credible maintains an ‘excellent’ Trustpilot rating.
What does this mean: Mortgage refinance rates rose today for 15-year terms, while rates for all other repayment terms remained steady. However, homeowners will find greater interest savings with 15-year rates, which remain the lowest available at 5.875%. But homeowners looking to refinance into a longer repayment term may want to consider a 20-year refinance. At 6%, a 20-year term offers a desirable combination of a relatively low interest rate and smaller monthly payments.
How mortgage rates have changed over time
Today’s mortgage rates are well below the highest annual average rate recorded by Freddie Mac — 16.63% in 1981. A year before the COVID-19 pandemic rocked economies around the world, the average interest rate for 30 year fixed mortgage rate for 2019 was 3.94%. The average for 2021 was 2.96%, the lowest annual average in 30 years.
The historic drop in interest rates means that homeowners who have mortgages from 2019 and older could potentially make significant interest savings by refinancing at one of today’s lowest interest rates. When considering a refinance or purchase mortgage, it’s important to consider closing costs such as appraisal, application, origination and attorney fees. These factors, in addition to the interest rate and loan amount, contribute to the cost of a mortgage.
How reliable mortgage rates are calculated
Changing economic conditions, central bank policy decisions, investment sentiment and other factors affect the movement of mortgage interest rates. Credible’s average mortgage rates and mortgage refinance rates reported in this article are calculated based on information provided by affiliated lenders who pay Credible compensation.
The rates assume a borrower has a credit score of 740 and is borrowing a conventional home loan that will be their primary residence. Prices also assume no (or very low) discount points and a 20% down payment.
The reliable mortgage rates listed here will only give you an idea of current average interest rates. The percentage you actually receive may vary depending on a number of factors.
How much can I borrow for a mortgage?
It’s critical to have an idea of how much you can afford to borrow on a mortgage before you start home shopping or make an offer on a home.
Generally, the 28/36 rule is a good measure of how much you can afford to borrow without breaking the bank. The rule states that your mortgage payment, including taxes and insurance, should not exceed 28% of your gross monthly income. And all of your debt, including your mortgage and other monthly expenses like car and student loan payments, can’t exceed 36% of your gross monthly income.
For example, if your gross monthly income is $6,250 ($75,000 annual salary), you should be able to afford a monthly payment of $1,750. And your total monthly debt load must not exceed $2,250.
A general rule of thumb is that you should not take out a mortgage that is two to two and a half times your gross annual income. So, in the above scenario, the maximum you would need to borrow to buy a home would be $187,500.
Ultimately, lenders determine how much you can afford to borrow by weighing your income, debt, assets, credit and other financial factors.
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 default rates in just minutes.
Have a finance question but don’t know who to ask? Email your trusted money expert at moneyexpert@credible.com and your question can be answered by Credible in the Money Expert column.