Rates last updated on August 4, 2022. 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 rates for 20- and 30-year terms plummeted back below the 5% mark today, with rates for 30-year terms falling more than half a percentage point. Meanwhile, rates for 15-year terms edged up a quarter point, and 10-year rates held steady. With rates for all repayment terms back below 5%, borrowers may want to lock in a rate today ahead of future increases.
To find great mortgage rates, start by using Credible’s secured 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 estimate your monthly mortgage payments.
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 refinance or purchase, 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
Changing economic conditions, central bank policy decisions, investor sentiment and other factors influence the movement of mortgage rates. Credible average mortgage rates and mortgage refinance rates reported in this article are calculated based on information provided by partner lenders who pay compensation to Credible.
The rates assume a borrower has a 740 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%.
Credible mortgage rates reported here will only give you an idea of current average rates. The rate you actually receive can vary based on a number of factors.
Factors that influence mortgage rates (and are out of your control)
Many factors influence the interest rate a lender may offer you. Some – such as your credit score – are in your control. But others you have no ability to affect, such as:
The economy – During financial downturns, the Fed may lower interest rates to try to stimulate the economy. And when the economy is doing well, interest rates can rise.
Inflation – Interest rates tend to move with inflation. When the overall cost of goods and services increases, interest rates are also likely to rise.
The Federal Reserve – The Fed may choose to lower interest rates to stimulate a struggling economy, or raise rates in an attempt to put the brakes on inflation.
Macro employment trends – When many people are out of work, as they were during the months of pandemic lockdown, mortgage rates may fall. As employment increases, interest rates typically also increase.