Today’s lowest mortgage rate? 10-year terms at 6.625% | August 22, 2023
Borrowers still have the chance to lock in their preferred rate from last week, as most mortgage purchase rates have remained unchanged
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Updated October 16, 2024, 2:57 AM EDT
- 30-year fixed mortgage rates: 8.125%, unchanged
- 20-year fixed mortgage rates: 8.125%, unchanged
- 15-year fixed mortgage rates: 6.875%, up from 6.375%, +0.500
- 10-year fixed mortgage rates: 6.625%, unchanged
Rates last updated on August 22, 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 purchase rates for 30-, 20-, and 10-year terms have remained unchanged at 8.125% and 6.275% respectively. Rates for 15-year terms edged up a half of a percentage point, from 6.375% the day before to 6.875%. Borrowers looking to maximize their interest savings should consider 10-year terms, as 6.625% is today’s lowest purchase rate. Homebuyers who would rather have a smaller monthly payment should instead consider either of today’s longer terms.
- 30-year fixed-rate refinance: 7.250%, up from 7.125%, +0.125
- 20-year fixed-rate refinance: 7.375%, up from 7.250%, +0.125
- 15-year fixed-rate refinance: 6.625%, up from 6.375%, +0.250
- 10-year fixed-rate refinance: 6.625%, up from 6.375%, +0.250
Rates last updated on August 22, 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 increased for all terms. Homebuyers who would rather have a smaller monthly payment should instead consider either of today’s longer terms. Borrowers who would rather save the most on interest should instead consider 10- and 15-year terms, as those rates are currently the lowest.
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
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%.
Factors that influence mortgage rates (and are in your control)
Many factors affect what mortgage interest rate you can qualify for, and some of them are within your control. Improving these factors could help you qualify for a lower interest rate.
- Credit score — Generally, the lowest interest rates go to borrowers with the highest credit scores.
- Debt-to-income ratio — DTI is a percentage that compares your total debts with your income. To calculate DTI, divide the total of all your monthly minimum debt payments by your gross monthly income. Generally, lenders prefer a DTI of 35% or less.
- Down payment amount — Generally, lenders (and many sellers) look favorably on a higher down payment amount. If you put down less than 20% of the home’s purchase price, many lenders will require you to pay for private mortgage insurance, which protects the lender (not you) if you fail to repay the mortgage.
- Home location/price — Interest rates can vary depending on what state you live in and where in the state you’re buying. Likewise, if you need to borrow a lot more than average (a jumbo loan) or very little, you may get a higher interest rate.
- Repayment term — The lowest rates typically come with 10- or 15-year terms, while 30-year terms usually have the highest interest rates.
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