Today’s lowest mortgage rates? Consider today's shorter terms | August 30, 2023
Mortgage rates have either fallen or remained unchanged, giving borrowers the opportunity to lock in their preferred rate from yesterday without missing out on any savings
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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: 6.250%, down from 6.500%, -0.250
- 10-year fixed mortgage rates: 6.250%, down from 6.500%, -0.250
Rates last updated on August 30, 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 have maintained their several-week patterns. Both of the longer terms have stayed the same, at 8.125%, while the shorter terms remain in the 6% range. Today, rates for 10- and 15-year terms have fallen by a quarter of a percentage point to 6.25%. Borrowers interested in saving the most on interest should consider either of today’s shorter terms, as 6.25% is today’s lowest purchase rate. Homebuyers who would rather have a lower monthly payment should instead consider either of today’s longer terms.
- 30-year fixed-rate refinance: 6.990%, unchanged
- 20-year fixed-rate refinance: 6.750%, unchanged
- 15-year fixed-rate refinance: 6.125%, down from 6.375%, -0.250
- 10-year fixed-rate refinance: 6.250%, down from 6.625%, -0.375
Rates last updated on August 30, 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 all remained in the 6% range for the past two days. Today, rates for 20- and 30-year terms have stayed the same, remaining at 6.75% and 6.99%, respectively. Meanwhile, rates for 15-year terms have fallen by a quarter of a percentage point to 6.125%. Additionally, rates for 10-year terms have also fallen, dropping by over a quarter of a percentage point to 6.25%. Homeowners looking to refinance into a smaller monthly payment should consider 20-year terms, as their rates are nearly a quarter of a percentage point lower than those of 30-year terms. Borrowers who would rather maximize their interest savings should instead consider 15-year terms, as 6.125% is today’s lowest refinance rate.
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%.
How much can I borrow for a mortgage?
It’s critical to have an idea of how much you can afford to borrow for a mortgage before you begin home shopping or make an offer on a house.
Generally, the 28/36 rule is a good measure of how much you can afford to borrow without strapping your finances. The rule states that your mortgage payment, including taxes and insurance, shouldn’t be more than 28% of your gross monthly income. And all your debts, including your mortgage and other monthly expenses like car and student loan payments, shouldn’t exceed 36% of your gross monthly income.
For example, if your gross monthly income is $6,250 (annual salary of $75,000), you should be able to afford a monthly payment of $1,750. And your total monthly debt load shouldn’t exceed $2,250.
A general rule of thumb is that you shouldn’t take out a mortgage that’s two to two and half times your gross annual income. So in the above scenario, the maximum you should borrow to buy a house 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.
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