A couple of closely followed mortgage rates moved up over the last seven days. The average 15-year fixed and 30-year fixed mortgage rates both inched upward. We also saw a hike in the average rate of 5/1 adjustable-rate mortgages.

As inflation surged in 2022, so too did mortgage rates. To rein in price growth, the Federal Reserve began bumping up its federal funds rate — a short term interest rate that determines what banks charge each other to borrow money. By making it more expensive to borrow, the central bank’s goal is to reduce prices by curtailing consumer spending.

During its July 26 meeting, the Fed initiated a 25-basis point (or 0.25%) hike to its federal funds rate, marking its 11th increase in the current rate hiking cycle. The most recent increase could have an impact on mortgage rates, but experts say the markets may have already factored it into rates.

Current mortgage rates for July 2023

The Federal Reserve just increased interest rates. That might cause a change in mortgage rates. Shop around and find a rate you can afford now. By entering your information below, you can get a custom quote from one of CNET’S partner lenders. 

About these rates: Like CNET, Bankrate is owned by Red Ventures. This tool features partner rates from lenders that you can use when comparing multiple mortgage rates.

“Mortgage rates will continue to ebb and flow week to week, but ultimately, I think rates will stick to that 6% to 7% range we’re seeing now,” said Jacob Channel, senior economist at loan marketplace LendingTree.

The Fed doesn’t set mortgage rates directly, but it does play an influential role. Mortgage rates move around on a daily basis in response to a range of economic factors, including inflation, employment and the broader outlook for the economy. A lower inflation rate is good news for mortgage rates, but the potential for additional hikes from the central bank this year will keep upward pressure on already high rates.

Rather than worrying about mortgage rates, though, homebuyers should focus on what they can control: getting the best rate they can for their financial situation.

To increase your odds at qualifying for the lowest rate available, take the steps necessary to improve your credit score and to save for a down payment. Also, be sure to compare the rates and fees from multiple lenders to get the best deal. Looking at the annual percentage rate, or APR, will show you the total cost of borrowing and help you make an apples-to-apples comparison among lenders.

30-year fixed-rate mortgages

The 30-year fixed-mortgage rate average is 7.26%, which is an increase of 3 basis points compared to 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 mortgage will usually have a greater interest rate than a 15-year fixed rate mortgage — but also a lower monthly payment. You won’t be able to pay off your house as quickly and you’ll pay more interest over time, but a 30-year fixed mortgage is a good option if you’re looking to minimize your monthly payment.

15-year fixed-rate mortgages

The average rate for a 15-year, fixed mortgage is 6.55%, which is an increase of 1 basis point compared to a week ago. You’ll definitely have a bigger monthly payment with a 15-year fixed mortgage compared to a 30-year fixed mortgage, even if the interest rate and loan amount are the same. But a 15-year loan will usually be the better deal, as long as you can afford the monthly payments. You’ll typically get a lower interest rate, and you’ll pay less interest in total because you’re paying off your mortgage much quicker.

5/1 adjustable-rate mortgages

A 5/1 adjustable-rate mortgage has an average rate of 6.31%, a climb of 6 basis points from seven days ago. For the first five years, you’ll typically get a lower interest rate with a 5/1 adjustable-rate mortgage compared to a 30-year fixed mortgage. But changes in the market may cause your interest rate to increase after that time, as detailed in the terms of your loan. If you plan to sell or refinance your house before the rate changes, an ARM could make sense for you. But if that’s not the case, you may be on the hook for a much higher interest rate if the market rates shift.

Mortgage rate trends

Mortgage rates were historically low throughout most of 2020 and 2021, but increased steadily throughout 2022 as the Federal Reserve began aggressively hiking interest rates. Now, mortgage rates are well above where they were a year ago. What does this mean for homebuyers this year?

“Mortgage rates have hovered in the 6% to 7% range for the past 10 months. Though home prices have softened slightly nationally, the still-high cost of borrowing means hopeful home buyers have felt little relief,” said Hannah Jones, economic research analyst at Realtor.com.

However, if inflation continues to decline and the Fed is able to hold rates where they are and eventually cut them, mortgage rates are likely to decrease slightly in 2023. However, they’re highly unlikely to return to the rock-bottom levels of just a few years ago.

The most recent housing forecast from Fannie Mae calls for the average 30-year fixed mortgage rate to close out the year at around 6.6%.

“Mortgage rates have been volatile for some time now and while they could eventually start trending down over the next six months to a year as inflation growth continues to cool, their path is probably going to be bumpy,” Channel said.

We use rates collected by Bankrate to track daily mortgage rate trends. This table summarizes the average rates offered by lenders nationwide:

Today’s mortgage interest rates

Rates as of August 1, 2023.

How to find personalized mortgage rates

When you are ready to apply for a loan, you can connect with a local mortgage broker or search online. When researching home mortgage rates, take into account your goals and current financial situation.

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

The interest rate isn’t the only factor that affects the cost of your home. Be sure to also consider other factors such as fees, closing costs, taxes and discount points. Make sure to comparison shop with multiple lenders — such as credit unions and online lenders in addition to local and national banks — in order to get a mortgage that’s the right fit for you.

How does the loan term impact my mortgage?

When picking a mortgage, it’s important to consider the loan term, or payment schedule. The most common loan terms are 15 years 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 fixed for the life of the loan. For adjustable-rate mortgages, interest rates are fixed for a certain number of years (usually five, seven or 10 years), then the rate changes annually based on the current interest rate in the market.

When choosing between a fixed-rate and adjustable-rate mortgage, you should think about the length of time you plan to stay in your home. Fixed-rate mortgages might be a better fit for people who plan on living in a home for a while. Fixed-rate mortgages offer greater stability over time in comparison to adjustable-rate mortgages, but adjustable-rate mortgages might 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 understand what’s most important to you when choosing a mortgage.