Rates Fall for Almost Every Mortgage Type - Investopedia

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Mortgage rates were decidedly down Friday, with the 30-year mortgage average ending the week an eighth of a point below the historic high it registered early in the week. The rate average for 30-year new purchase loans is now 8.33%, with rates for almost all other mortgage types falling as well. Only a few jumbo averages held steady Friday.

Because rates vary widely across lenders, it's always smart to shop around for your best mortgage option and compare rates regularly, no matter what type of loan you're seeking.

National Averages of Lenders' Best Rates
Loan Type	New Purchase	Refinance
30-Year Fixed	8.33%	8.58%
FHA 30-Year Fixed	8.23%	8.34%
Jumbo 30-Year Fixed	7.40%	7.40%
15-Year Fixed	7.56%	7.66%
5/6 ARM	7.79%	8.08%

National averages of the lowest rates offered by more than 200 of the country's top lenders, with a loan-to-value ratio (LTV) of 80%, an applicant with a FICO credit score of 700–760, and no mortgage points.

Today's Mortgage Rate Averages: New Purchase

Rates on 30-year mortgages subtracted 8 basis points Friday, lowering the average to 8.33%. On Monday and Tuesday, the flagship average had bolted more than a third of a percentage point higher to set a new 23-year high of 8.45%.

Compare the Best Mortgage Rates Today (October 2023)

Note

Freddie Mac released its latest weekly mortgage average Thursday, revealing that 30-year rates again hit a new 23-year high. After six weekly increases in a row, the Freddie Mac average is up to 7.63%, its highest level since late 2000.

Freddie Mac’s averages differ from the averages we publish here due to Freddie Mac calculating a weekly average that blends five previous days of rates, and which may include loans priced with discount points. In contrast, Investopedia’s averages indicate daily rate movement and only include zero-point loans.

The 15-year rate average gave up just 2 basis points Friday, dipping to 7.56%. The previous reading of 7.58% was the highest level for 15-year new purchase rates since 2000.

Friday's jumbo 30-year average meanwhile dropped a more substantial 12 basis points, falling to 7.40%. Daily jumbo rate history is not available before 2009, but it's estimated the recent 7.52% peak is the most expensive average for jumbo 30-year loans in more than 20 years.

National Averages of Lenders' Best Rates - New Purchase
Loan Type	New Purchase Rates	Daily Change
30-Year Fixed	8.33%	-0.08
FHA 30-Year Fixed	8.23%	-0.07
VA 30-Year Fixed	8.14%	-0.09
Jumbo 30-Year Fixed	7.40%	-0.12
20-Year Fixed	8.19%	-0.04
15-Year Fixed	7.56%	-0.02
FHA 15-Year Fixed	7.58%	-0.04
Jumbo 15-Year Fixed	7.40%	No Change
10-Year Fixed	7.62%	-0.03
10/6 ARM	8.05%	-0.07
7/6 ARM	7.93%	-0.04
Jumbo 7/6 ARM	7.21%	No Change
5/6 ARM	7.79%	-0.03
Jumbo 5/6 ARM	7.31%	No Change

Today's Mortgage Rate Averages: Refinancing

Friday movement in refinancing rates was largely in line with new purchase rates. The 30-year refi average similarly declined 8 basis points, keeping the gap between 30-year new purchase and refi rates at 25 basis points.

The 15-year refi average was flat, while the jumbo 30-year refi average gave up the same 12 basis points as its new purchase cousin. The 5/6 ARM refi average, however, climbed 10 basis points.

National Averages of Lenders' Best Rates - Refinance
Loan Type	Refinance Rates	Daily Change
30-Year Fixed	8.58%	-0.08
FHA 30-Year Fixed	8.34%	-0.04
VA 30-Year Fixed	8.41%	-0.04
Jumbo 30-Year Fixed	7.40%	-0.12
20-Year Fixed	8.43%	-0.06
15-Year Fixed	7.66%	No Change
FHA 15-Year Fixed	7.63%	+0.01
Jumbo 15-Year Fixed	7.40%	No Change
10-Year Fixed	7.60%	-0.04
10/6 ARM	8.27%	-0.09
7/6 ARM	8.11%	-0.04
Jumbo 7/6 ARM	7.31%	No Change
5/6 ARM	8.08%	+0.10
Jumbo 5/6 ARM	7.31%	No Change

Calculate monthly payments for different loan scenarios with our Mortgage Calculator.

The rates you see here generally won’t compare directly with teaser rates you see advertised online, since those rates are cherry-picked as the most attractive, while these rates are averages. Teaser rates may involve paying points in advance, or they may be selected based on a hypothetical borrower with an ultra-high credit score or taking a smaller-than-typical loan. The mortgage rate you ultimately secure will be based on factors like your credit score, income, and more, so it may be higher or lower than the averages you see here.

Lowest Mortgage Rates by State

The lowest mortgage rates available vary depending on the state where originations occur. Mortgage rates can be influenced by state-level variations in credit score, average mortgage loan type, and size, in addition to individual lenders' varying risk management strategies.

The states with the lowest 30-year new purchase averages Thursday were Tennessee, Rhode Island, Delaware, Louisiana, Massachusetts, Mississippi, Vermont, and Wisconsin, while the states with the highest averages were Arizona, Nevada, Minnesota, Georgia, Oregon, and Washington.

What Causes Mortgage Rates to Rise or Fall?

Mortgage rates are determined by a complex interaction of macroeconomic and industry factors, such as:

• The level and direction of the bond market, especially 10-year Treasury yields
• The Federal Reserve's current monetary policy, especially as it relates to bond buying and funding government-backed mortgages
• Competition between mortgage lenders and across loan types

Because fluctuations can be caused by any number of these at once, it's generally difficult to attribute the change to any one factor.

Macroeconomic factors kept the mortgage market relatively low for much of 2021. In particular, the Federal Reserve had been buying billions of dollars of bonds in response to the pandemic's economic pressures. This bond-buying policy is a major influencer of mortgage rates.

But starting in November 2021, the Fed began tapering its bond purchases downward, making sizable reductions each month until reaching net zero in March 2022.

Since that time, the Fed has been aggressively raising the federal funds rate to fight decades-high inflation. While the fed funds rate can influence mortgage rates, it does not directly do so. In fact, the fed funds rate and mortgage rates can move in opposite directions.

However, given the historic speed and magnitude of the Fed's 2022 and 2023 rate increases—raising the benchmark rate 5.25 percentage points over the last 18 months—even the indirect influence of the fed funds rate has resulted in an upward impact on mortgage rates over the last two years.

The Fed has two more rate-setting meetings scheduled in 2023, concluding Nov. 1 and Dec. 13. Though it's widely expected the Fed will hold rates steady at its November meeting, Fed Chair Jerome Powell has made it clear that another rate increase is certainly possible at a future meeting.

Methodology

The national averages cited above were calculated based on the lowest rate offered by more than 200 of the country's top lenders, assuming a loan-to-value ratio (LTV) of 80% and an applicant with a FICO credit score in the 700–760 range. The resulting rates are representative of what customers should expect to see when receiving actual quotes from lenders based on their qualifications, which may vary from advertised teaser rates.

For our map of the best state rates, the lowest rate currently offered by a surveyed lender in that state is listed, assuming the same parameters of an 80% LTV and a credit score between 700–760.

Investopedia / Alice Morgan

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