Mortgage rates are mostly higher today. The average 30-year fixed mortgage rate rose to 6.64%, up 10 basis points from last week, according to rates from the Zillow lender marketplace. The average 15-year fixed rate also moved higher, rising two basis points to 5.88%, while the 5/1 ARM jumped 50 basis points to 6.74%, according to Yahoo Finance.
Today's mortgage rates remain above 6%. According to the latest Zillow data for Sunday, August 23, the national average rates are:
- 30-year fixed: 6.64%
- 20-year fixed: 6.37%
- 15-year fixed: 5.88%
- 5/1 ARM: 6.74%
- 7/1 ARM: 6.30%
- 30-year VA: 6.14%
- 15-year VA: 5.59%
- 5/1 VA: 5.84%
Today's Mortgage rates
The rates are national averages. The Zillow figures are rounded to the nearest hundredth, so the rate a homebuyer actually gets can be different. Several factors can influence the mortgage rate a borrower ultimately receives, including their credit score, loan amount, down payment and choice of lender.
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30-year vs 15-year Mortgage
The 30-year fixed mortgage remains the most widely used option, with the average rate at 6.64%. By spreading repayment across 360 months, borrowers generally get lower monthly payments than they would with a shorter-term loan.
{{/usCountry}}The 30-year fixed mortgage remains the most widely used option, with the average rate at 6.64%. By spreading repayment across 360 months, borrowers generally get lower monthly payments than they would with a shorter-term loan.
{{/usCountry}}The 15-year fixed mortgage comes with a lower average rate of 5.88%, but the shorter repayment period means significantly higher monthly payments. The trade-off is that borrowers can pay off their mortgage 15 years sooner and save substantially on interest over the life of the loan.
For a $300,000 mortgage, the difference can be significant. At 6.41% over 30 years, the monthly principal-and-interest payment would be about $1,878.48, with roughly $376,254 paid in interest over the full term.
A 15-year mortgage at 5.80% would raise the monthly payment to about $2,499.27. However, total interest would drop dramatically to roughly $149,869, showing how a shorter loan term can reduce borrowing costs despite the higher monthly payment.
Refinance Mortgage rates
Refinance rates are also being watched today. Zillow's latest data shows the following national average refinance rates for August 23:
- 30-year fixed: 6.64%
- 20-year fixed: 6.61%
- 15-year fixed: 5.99%
- 5/1 ARM: 6.50%
- 7/1 ARM: 6.51%
- 30-year VA: 6.02%
- 15-year VA: 5.70%
- 5/1 VA: 5.63%
Refinancing does not always mean getting a lower rate. Mortgage refinance rates are often higher than purchase mortgage rates, although that is not always the case. Homeowners should compare their current mortgage rate, the new rate and the closing costs before deciding whether refinancing makes sense.
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Fixed vs adjustable rates
Fixed-rate mortgages offer more certainty. With a fixed-rate mortgage, the interest rate stays locked for the full term of the loan. The rate can change only if the borrower later refinances into a new mortgage. Adjustable-rate mortgages can change later. An ARM keeps the initial interest rate fixed for a set period. After that period ends, the rate can move higher or lower depending on economic conditions and the limits written into the loan contract.
A 7/1 ARM is fixed for seven years. After the first seven years, the interest rate can change every year for the remaining 23 years of a 30-year mortgage. This can make an ARM attractive to buyers who expect to move or refinance before the initial fixed period ends, but there is a risk that payments could rise later.
ARMs usually start with lower rates, but today's market is different. Adjustable-rate mortgages have traditionally started below fixed-rate mortgages. However, some fixed mortgage rates have recently been lower than adjustable rates, making it important for borrowers to compare the actual offers available from lenders.
What this means for homebuyers today: Mortgage rates are still relatively high, with the average 30-year fixed rate at 6.64%. Buyers deciding between a 15-year, 30-year or adjustable-rate mortgage should look beyond the headline rate and consider their monthly budget, how long they plan to stay in the home and how much interest they could pay over time.