Source: MPA Mag —
Mortgage rates depend on numerous factors, including the broader economic outlook and the individual borrower. Therefore, mortgage rates can fluctuate wildly not only within the same year—but within the same week, as well.
In 2022, for example, the average 30-year mortgage rate was under 4%. By the end of the same year, that number had risen to over 7%. And at the beginning of January 2023, the US national average 15-year fixed refinance dropped 21 basis points from the previous week, to just under 6%.
While factors out of your control—like the Federal Reserve increasing the base interest rate to combat inflation—can impact mortgage rates overall, there are steps you can take to lower your own mortgage interest rate. (Shopping around and making a larger down payment are a couple of ways.)
Here is everything you need to know about the average mortgage rate, from what impacts it to how other countries compare to how to secure a better rate.
Average mortgage rate
As of January 2023, the average rate for a 30-year fixed mortgage was 6.46%, which was down six basis points from the previous week. That same day, the national 30-year refinance rate was at 6.50%, which was a drop of 11 basis points from the previous week. The US national average 15-year fixed refinance, meanwhile, was down 21 basis points from the past week to 5.94%.
By comparison, Canada’s central bank is expected to increase mortgage interest rates by 0.25% in early January 2023 to 4.50%. In the UK, on the other hand, the average rate for a five-year fixed-rate mortgage is 5.24%.
These numbers will, of course, fluctuate from week to week, especially during this time of volatility.
Is a 4% mortgage rate high?
Currently, a 4% mortgage rate would be considered low. If that question was asked at the beginning of 2022—when 30-year mortgage rates for conforming loans was 3.77%–instead of the end of 2022—when the same mortgage rates were 7.06%—the answer would have been, yes, a 4% mortgage rate is high.
That’s because mortgage rates are not only different depending on each individual borrower; but in today’s market, mortgage rates fluctuate even within the same day. In other words, a mortgage rate that is considered high one day could be considered low the next, and vice versa.
Is 4.75% a good interest rate for a mortgage?
Currently, yes—4.75% is a good interest rate for a mortgage. While mortgage rates fluctuate so often—which can affect the definition of a good interest rate for a mortgage—4.75% is lower than the current average for both a 15-year fixed loan and a 30-year mortgage.
At the end of 2022, good mortgage rates for 15-year fixed loans generally started around 5%. Good rates for 30-year mortgages, on the other hand, generally started in the 6% range. Specifically, in November 2022, the average 30-year fixed rate was 6.61%, according to Freddie Mac. That weekly survey represented a wide range of borrowers, so keep in mind that anyone with solid finances can typically get rates significantly below average.
Predictions for average mortgage rates in 2023
Industry insiders surveyed by The Mortgage Reports predicted that 30-year fixed-rate mortgages in 2023 could be as low as 5% to just over 9%. If 2023 follows the same trend as 2022—rising steadily before seeing a significant drop at the end of the year—the end of this year could see average mortgage rates stall between 5% and 6%.
Specifically, experts predict the average 30-year mortgage rates to be between 5.0% and 9.31% this year and the average 15-year fixed mortgage rate to be between 4.5% and 8.75%. That means the average mortgage rate forecast for 2023 is 7.0% for 30-year fixed rates and 6.42% for 15-year fixed rates. If these predictions held true, that would make 4.75% a good interest rate for a mortgage.
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