This should help ease the upward pressure on mortgage rates.įor homeowners looking to leverage their home's value to cover a big purchase - such as a home renovation - a home equity line of credit (HELOC) may be a good option while we wait for mortgage rates to ease. But the Fed is looking for sustained signs of slowing inflation, which means it's not likely to stop hiking rates any time soon, though officials have said they expect to start slowing the pace of hikes. This is good news for mortgage borrowers and the broader economy.Īs inflation comes down, mortgage rates likely will, too. In April 2023, the Consumer Price Index rose 4.9% year-over-year, a significant slowdown compared to the previous month. Mortgage rates increased dramatically in 2022 and have been volatile so far in 2023, but they're expected to trend down later this year. However, you'll have a higher monthly payment than you would with a longer term. 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. If you want the predictability that comes with a fixed rate but are looking to spend less on interest over the life of your loan, a 15-year fixed-rate mortgage might be a good fit for you.
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The average 15-year fixed mortgage rate is 6.18% this week, according to Freddie Mac data.
The trade-off is that you'll have a higher rate than you would with shorter terms or adjustable rates. The lengthy 30-year term allows you to spread out your payments over a long period of time, meaning you can keep your monthly payments lower and more manageable. With this type of mortgage, you'll pay back what you borrowed over 30 years, and your interest rate won't change for the life of the loan. The 30-year fixed-rate mortgage is the most common type of home loan. This is an increase from the previous week. This week's average 30-year fixed mortgage rate is 6.79%, according to Freddie Mac.
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