Mortgage rates over the last seven days had no specific trajectory, but an important rate inched upward. The average 15-year fixed mortgage rate decreased, while the average 30-year fixed mortgage rate climbed higher. The average rate of the most common type of variable-rate mortgage, the 5/1 adjustable-rate mortgage, dropped.

Mortgage rates increased dramatically in 2022, as the Federal Reserve hiked interest rates repeatedly throughout the year. Interest rates are dynamic and unpredictable — at least on a daily or weekly basis — and they respond to a wide variety of economic factors. But the Fed’s actions, designed to mitigate the high rate of inflation, had an unmistakable impact on mortgage rates.

The outlook for 2023 remains uncertain. Though higher rates are likely to here to stay, the biggest increases may be behind us. That noted, trying to time the market is tricky. If inflation persists, more interest rate hikes could follow. As such, you may have better luck locking in a lower mortgage interest rate now instead of waiting; after all, you can always refinance later on. No matter when you decide to shop for a home, it’s always a good idea to seek out multiple lenders to compare rates and fees to find the best mortgage for your specific situation.

30-year fixed-rate mortgages

The average interest rate for a standard 30-year fixed mortgage is 6.47%, which is an increase of 7 basis points from one week ago. (A basis point is equivalent to 0.01%.) The most frequently used loan term is a 30-year fixed mortgage. A 30-year fixed rate mortgage will usually have a smaller monthly payment than a 15-year one — but typically a higher interest rate. Although you’ll pay more interest over time — you’re paying off your loan over a longer timeframe — if you’re looking for a lower monthly payment, a 30-year fixed mortgage may be a good option.

15-year fixed-rate mortgages

The average rate for a 15-year, fixed mortgage is 5.63%, which is a decrease of 10 basis points compared to a week ago. Compared to a 30-year fixed mortgage, a 15-year fixed mortgage with the same loan value and interest rate will have a higher monthly payment. But a 15-year loan will usually be the better deal, as long as you’re able to afford the monthly payments. These include typically being able to get a lower interest rate, paying off your mortgage sooner, and paying less total interest in the long run.

5/1 adjustable-rate mortgages

A 5/1 ARM has an average rate of 5.38%, a fall of 8 basis points from seven days ago. With an adjustable-rate mortgage mortgage, you’ll usually get a lower interest rate than a 30-year fixed mortgage for the first five years. But you could end up paying more after that time, depending on the terms of your loan and how the rate changes with the market rate. For borrowers who plan to sell or refinance their house before the rate changes, an adjustable-rate mortgage could be a good option. If not, shifts in the market could significantly increase your interest rate.

Mortgage rate trends

Mortgage rates were historically low at the beginning of 2022 but climbed steadily throughout the year. The Federal Reserve raised interest rates seven times in an attempt to curb record-high inflation. As a general rule, when inflation is low, mortgage rates tend to be lower. When inflation is high, rates tend to be higher.

Though the Fed does not directly set mortgage rates, the central bank’s policy actions influence how much you pay to finance your home loan. If you’re looking to buy a house, keep in mind that the Fed has signaled it will continue to raise rates in 2023, and that those increases may drive mortgage rates even higher.

We use rates collected by Bankrate, which is owned by the same parent company as CNET, to track changes in these daily rates. This table summarizes the average rates offered by lenders nationwide:

Current average mortgage interest rates

Rates as of Jan. 23, 2023.

How to shop for the best mortgage rate

To find a personalized mortgage rate, talk to your local mortgage broker or use an online mortgage service. When looking into home mortgage rates, consider your goals and current finances.

Things that affect what the interest rate you might get on your mortgage include: your credit score, down payment, loan-to-value ratio and your debt-to-income ratio. Generally, you want a higher credit score, a larger down payment, a lower DTI and a lower LTV to get a lower interest rate.

Aside from the mortgage interest rate, additional costs including closing costs, fees, discount points and taxes might also impact the cost of your house. Be sure to speak with a variety of lenders — such as local and national banks, credit unions and online lenders — and comparison shop to find the best loan for you.

What is a good loan term?

When picking a mortgage, remember to consider the loan term, or payment schedule. The most common loan terms are 15 and 30 years, although 10-, 20- and 40-year mortgages also exist. Another important distinction is between fixed-rate and adjustable-rate mortgages. For fixed-rate mortgages, interest rates are set for the life of the loan. For adjustable-rate mortgages, interest rates are the same for a certain number of years (commonly five, seven or 10 years), then the rate fluctuates annually based on the market rate.

When choosing between a fixed-rate and adjustable-rate mortgage, you should consider the length of time you plan to live in your home. For people who plan on living long-term in a new house, fixed-rate mortgages may be the better option. Fixed-rate mortgages offer greater stability over time compared to adjustable-rate mortgages, but adjustable-rate mortgages may offer lower interest rates upfront. However you could get a better deal with an adjustable-rate mortgage if you only intend to keep your home for a couple years. There is no best loan term as a rule of thumb; it all depends on your goals and your current financial situation. Be sure to do your research and know your own priorities when choosing a mortgage.