Current mortgage rates

Lenders base mortgage interest rates on the benchmark interest rate, along with other factors such as credit score, loan-to-value (LTV) ratio, size of the loan, type of loan and loan term. However, there are ways you can get better rates.

Here are the current mortgage rates as well as how to get the best rate and deal when you’re ready to shop for a mortgage.

As of December 9, the average annual percentage rate (APR) for a 30-year fixed mortgage is 6.52%. This is about double the 3.22% rate we saw at the beginning of 2022 and down from 6.67% the week prior.

The average APR of a 15-year, fixed-rate mortgage is 5.91%—down from 6.04% the week before. But this rate is still far higher than the 2.43% low back in early January 2022. 

While fixed rates are beginning to show signs of cooling, adjustable-rate mortgages (ARMs) can also still be an affordable option. As of December 14, the average 5/1 ARM APR is currently 7.45%, up just slightly from 7.40% the week before.

Fixed-rate mortgages

The most common type of mortgage is a fixed-rate mortgage, with roughly 90% of borrowers choosing a 30-year term. A 15-year, fixed-rate mortgage is another option for borrowers—here is how the two compare:

• 30-year fixed-rate mortgage: This is a stable, long-term home loan that typically provides the advantage of lower monthly payments compared to a shorter term. This is because you’re paying off your loan over a more extended period—in this case, 360 months. 

• 15-year fixed-rate mortgage: This home loan functions the same way as the 30-year fixed-rate mortgage but for half the term. As a result, your monthly payments will be higher. But because you’ll be paying off the loan sooner, you’ll typically save money on interest over the life of the loan. Additionally, interest rates on 15-year mortgages are usually lower than 30-year mortgage rates. 

Adjustable-rate mortgages

An ARM is a type of mortgage where you pay a fixed rate during an initial phase. Afterward, you’ll enter an adjustable-rate period for the remaining duration of the loan. 

ARM interest rates are usually lower than conventional fixed rates. If you’re only looking to own your home for a short time or conventional mortgage interest rates are high, then an ARM may be a good option. However, ARMs aren’t right for everyone.

Generally, the shorter the fixed term, the lower the introductory interest rate when it comes to ARMs. Here are some popular ARM types:

• 5/1 ARM: Probably the most popular ARM, a 5/1 ARM has a fixed rate for five years, and then your rate will adjust once annually for the life of the loan.

• 7/1 ARM: A 7/1 ARM has a fixed rate for the first seven years, and then your rate will adjust once annually for the life of the loan.

• 10/1 ARM: A 10/1 ARM has a fixed rate for the first 10 years, and then your rate will adjust once annually for the life of the loan

The first thing you should do before shopping for rates is check your credit score. Experts advise improving your credit score as much as possible beforehand since the better your score, the more likely it is that you’ll qualify for a lower rate.

“Keeping your credit card balances under 20% of the credit limit is the key to maintaining a good score,” says Stephen Rinaldi, a licensed mortgage broker and president of the Rinaldi Group LLC.

Along with getting your credit in order, here are the other steps you should take before getting a mortgage:

1. Save money for a down payment. The more you can put down on a home, the lower your LTV ratio, which compares your loan size to the value of your home. A low LTV ratio puts you in a better position to get a better rate since lenders will view you as less of a risk. In general, lenders typically view 80% (which is what you’ll have with a 20% down payment) as a good LTV ratio.

2. Compare rates from multiple lenders. Don’t just accept the rate of the first lender you check out. Shop around online, by phone or in person directly at banks and credit unions, and compare multiple lenders for the best deal.

3. Get prequalified and preapproved. A mortgage prequalification estimates how much of a mortgage you can afford, taking into account only a small sample of data you provide. During the preapproval process, however, a lender takes a deeper dive into your finances and credit history. The result is a preapproval letter that documents the actual amount the lender is willing to loan you. When you’re ready to take that next step, getting preapproved—and having a preapproval letter to show the seller—is a good idea.