As we near the end of March 2023, the mortgage market has seen some movement in interest rates. According to Bankrate.com, the average rate on a 30-year fixed mortgage is 6.93%, while the average rate on a 15-year mortgage is 6.18%. Jumbo mortgages with a 30-year term have an average rate of 7.01%, and the average rate on a 5/1 adjustable-rate mortgage (ARM) is 5.65%.
While it can be concerning to see interest rates rise, it’s important to understand the bigger picture and how these changes can impact borrowers. In this article, we’ll take a closer look at current mortgage rates, what they mean for borrowers, and some tips for navigating the current market.
30-Year Fixed-Rate Mortgages
The current average rate on a 30-year fixed-rate mortgage is 6.93%, which is up 0.12% from the previous week’s rate of 6.81%. Over the past year, the lowest rate seen was 4.84%, while the highest was 7.41%.
One factor to keep in mind when looking at mortgage rates is the annual percentage rate (APR), which reflects the all-in cost of the loan. For a 30-year fixed-rate mortgage, the APR is currently 6.95%, up from 6.82% the previous week.
For borrowers, the increase in interest rates means higher monthly payments. A $100,000 mortgage with a 30-year term and an interest rate of 6.93% would result in a monthly payment of $661 for principal and interest alone (taxes and fees not included), according to the Forbes Advisor mortgage calculator. Over the life of the loan, the borrower would pay around $137,819 in total interest.
15-Year Fixed-Rate Mortgages
The current average rate on a 15-year fixed-rate mortgage is 6.18%, up 0.09% from the previous week’s rate of 6.09%. Over the past year, the lowest rate seen was 4.09%.
The APR on a 15-year fixed-rate mortgage is currently 6.21%, compared to 6.12% the previous week.
While a 15-year term means higher monthly payments, borrowers benefit from a lower interest rate and a shorter repayment period. For a $100,000 mortgage with a 15-year term and an interest rate of 6.18%, the monthly payment would be $854 (not including taxes and insurance). Over the life of the loan, the borrower would pay around $53,650 in total interest.
Jumbo mortgages, which are loans that exceed the conforming loan limits set by Fannie Mae and Freddie Mac, have higher interest rates than conventional mortgages. The current average rate on a 30-year fixed-rate jumbo mortgage is 7.01%, up 0.14% from the previous week’s rate of 6.87%. Over the past year, the lowest rate seen was 4.86%.
For borrowers, a jumbo mortgage can mean higher monthly payments and a more stringent application process. A $750,000 mortgage with a 30-year term and an interest rate of 7.01% would result in a monthly payment of around $5,000 for principal and interest alone. Over the life of the loan, the borrower would pay roughly $1,048,130 in total interest.
5/1 Adjustable-Rate Mortgages
An adjustable-rate mortgage (ARM) has an interest rate that can fluctuate over time, which means the borrower’s monthly payments can also change. The current average rate on a 5/1 ARM is 5.65%. If you lock in this rate on a $100,000 loan, your monthly payments (including principal and interest) will be $577.
Remember, these rates can vary depending on your personal financial situation, so be sure to shop around and find the best rate for you. And if you’re not sure how to calculate your monthly mortgage payment, use a mortgage calculator. It’ll take into account your home price, down payment, interest rate, loan term, taxes, insurance, and any HOA fees.
When it comes to how much house you can afford, there are a few factors to consider, such as your income, debt, debt-to-income ratio (DTI), down payment, and credit score.
So, that’s the latest on mortgage interest rates. Keep in mind that rates can change quickly, so it’s always a good idea to stay informed and be prepared.