“Current Mortgage and Refinance Rates as of August 29th, 2023 | A Day of Declining Rates”

Mortgage interest rates were mostly lower compared to a week ago, according to data compiled by Bankrate. Rates for 30-year fixed, 15-year fixed and jumbo loans moved lower, while rates for adjustable rate mortgages rose.

After increasing interest rates at 10 consecutive meetings in 2022 and 2023, the Federal Reserve finally paused at its June 14 meeting — only to resume July 26, with a quarter-point increase. The inflation rate has fallen to 3 percent, near the Fed’s official goal of 2 percent, and housing economists say the end is near for the central bank’s intense fight against inflation. “We do expect mortgage rates to trend down once the [Federal Open Market Committee] clearly signals that they have reached the peak for this cycle, as the reduction in uncertainty with respect to the direction of rates should narrow the spread of mortgage rates relative to Treasury benchmarks,” says Mike Fratantoni, chief economist at the Mortgage Bankers Association.

Current average mortgage rates
Loan term Today’s Rate Last week Change
30-year mortgage rate 7.54% 7.62% -0.08
15-year mortgage rate 6.82% 6.83% -0.01
5/1 ARM mortgage rate 6.54% 6.50% +0.04
30-year jumbo mortgage rate 7.53% 7.67% -0.14

Rates accurate as of August 29, 2023.

These rates are marketplace averages based on the assumptions indicated here. Actual rates available across the site may vary. This story has been reviewed by Suzanne De Vita. All rate data accurate as of Tuesday, August 29th, 2023 at 7:30 a.m.

>>Check out historical mortgage interest rate movements

You can save thousands of dollars over the life of your mortgage by getting at least three rate quotes. Comparing mortgage offers from multiple lenders is always a smart move, but shopping around grew especially critical during the interest rate run-up of 2022, according to research by mortgage giant Freddie Mac. It found the payoff for bargain-hunting borrowers doubled last year.

“All too often, some homeowners take the path of least resistance when seeking a mortgage, in part because the process of buying a home can be stressful, complicated and time-consuming,” says Mark Hamrick, senior economic analyst for Bankrate. “But when we’re talking about the potential of saving a lot of money, seeking the best deal on a mortgage has an excellent return on investment. Why leave that money on the table when all it takes is a bit more effort to shop around for the best rate, or lowest cost, on a mortgage?”

Mortgage rates for home purchase

Current 30 year mortgage rate eases, -0.08%

The average rate for a 30-year fixed mortgage is 7.54 percent, down 8 basis points over the last week. A month ago, the average rate on a 30-year fixed mortgage was lower, at 7.31 percent.

At the current average rate, you’ll pay a combined $701.96 per month in principal and interest for every $100,000 you borrow. That’s $5.49 lower, compared with last week.

The popular 30-year mortgage has a number of advantages, including:

15-year mortgage rate slides,-0.01%

The average 15-year fixed-mortgage rate is 6.82 percent, down 1 basis point over the last week.

Monthly payments on a 15-year fixed mortgage at that rate will cost approximately $889 per $100k borrowed. Yes, that payment is much bigger than it would be on a 30-year mortgage, but it comes with some big advantages: You’ll come out several thousand dollars ahead over the life of the loan in total interest paid and build equity much faster.

5/1 adjustable rate mortgage goes up, +0.04%

The average rate on a 5/1 ARM is 6.54 percent, up 4 basis points since the same time last week.

Adjustable-rate mortgages, or ARMs, are mortgage loans that come with a floating interest rate. In other words, the interest rate can change intermittently throughout the life of the loan, unlike fixed-rate loans. These loan types are best for people who expect to sell or refinance before the first or second adjustment. Rates could be substantially higher when the loan first adjusts, and thereafter.

While borrowers shunned ARMs during the pandemic days of super-low rates, this type of loan has made a comeback as mortgage rates have risen.

Monthly payments on a 5/1 ARM at 6.54 percent would cost about $635 for each $100,000 borrowed over the initial five years, but could ratchet higher by hundreds of dollars afterward, depending on the loan’s terms.

Jumbo loan interest rate declines, -0.14%

The average jumbo mortgage rate is 7.53 percent, a decrease of 14 basis points over the last week. A month ago, jumbo mortgages’ average rate was below that, at 7.35 percent.

At today’s average rate, you’ll pay $701.27 per month in principal and interest for every $100,000 you borrow. That’s lower by $9.62 than it would have been last week.

Summary: How interest rates have changed

Mortgage refinance rates

30-year mortgage refinance declines, –0.01%

The average 30-year fixed-refinance rate is 7.78 percent, down 1 basis point from a week ago. A month ago, the average rate on a 30-year fixed refinance was lower, at 7.45 percent.

At the current average rate, you’ll pay $718.49 per month in principal and interest for every $100,000 you borrow. That represents a decline of $0.69 over what it would have been last week.

Rate trends: Where are mortgage rates headed?

The days of sub-3 percent mortgage interest on the 30-year fixed are behind us, and rates have so far risen beyond 7 percent in 2022.

“Low interest rates were the medicine for economic recovery following the financial crisis, but it was a slow recovery so rates never went up very far,” says McBride. “The rebound in the economy, and especially inflation, in the late pandemic stages has been very pronounced, and we now have a backdrop of mortgage rates rising at the fastest pace in decades.”

Comparing mortgage terms

The 30-year fixed-rate mortgage is the most popular option for homeowners, and this type of loan has a number of advantages, including:

That said, shorter-term loans have gained popularity as rates have been historically low. Although they have higher monthly payments compared to 30-year mortgages, there are some big benefits if you can afford the upfront costs. Shorter-term loans can help you achieve:

Determining how much house you can afford

If you’re not sure how much of your income should go toward housing, follow the traditional 28/36 percent rule. Most financial advisers agree that people should spend no more than 28% of their gross income on housing (i.e., your mortgage payment or rent), and no more than 36% of their gross income on total debt, including mortgage payments, credit cards, student loans, medical bills and the like. Calculate how much house you can afford and determine your monthly payments.

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