Today’s lowest mortgage rates? Shorter terms hold the biggest savings | July 26, 2023

Borrowers should take advantage of today’s shorter terms ahead of likely future increases

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Credible (Check out the mortgage purchase rates for July 26, 2023, which are largely unchanged from yesterday.)

Based on data compiled by Credible, mortgage rates for home purchases have remained unchanged for three key terms, while another has risen since yesterday.

Rates last updated on July 26, 2023. These rates are based on the assumptions shown here. Actual rates may vary. Credible, a personal finance marketplace, has 5,000 Trustpilot reviews with an average star rating of 4.7 (out of a possible 5.0).

What this means: Mortgage purchase rates have continued to keep 15-, 20-, and 30-year terms above 7%, while 10-year terms stay within the 5% range. Today, rates for 10-year terms have edged up to 5.75%. Meanwhile, rates for 20-year terms have remained as the day’s highest rate at 7.875%. Additionally, rates for 15- and 30-year terms have stayed the same at 7.125% and 7.5%, respectively. Borrowers interested in saving the most on interest rates should consider 10-year terms, as 5.75% is today’s lowest mortgage purchase rate. Homebuyers who would rather have a smaller monthly payment should instead consider 30-year terms, as their rates are the lowest out of the two longer terms.

To find great mortgage rates, start by using Credible’s secured website, which can show you current mortgage rates from multiple lenders without affecting your credit score. You can also use Credible’s mortgage calculator to estimate your monthly mortgage payments.

Based on data compiled by Credible, mortgage refinance rates have risen for three key terms, while another has held steady since yesterday.

Rates last updated on July 26, 2023. These rates are based on the assumptions shown here. Actual rates may vary. With 5,000 reviews, Credible maintains an "excellent" Trustpilot score.

What this means: Mortgage refinance rates continue to keep their longer terms above 6%. A new pattern has emerged, with the shorter terms joining the longer terms in maintaining rates above 6%. Today, rates for 20-year terms have remained unchanged at 6.625%. Meanwhile, rates for 30-year terms have jumped by a quarter of a percentage point to 6.875%. Additionally, rates for 10- and 15-year terms have edged up to 6.25% and 6.125%, respectively. Homeowners looking to maximize their interest savings should consider today’s lowest rate, 15-year terms at 6.125%. Borrowers who would rather have a lower monthly payment should instead consider 20-year terms, as their rates are a quarter of a percentage point lower than 30-year terms.

How mortgage rates have changed over time

Today’s mortgage interest rates are well below the highest annual average rate recorded by Freddie Mac — 16.63% in 1981. A year before the COVID-19 pandemic upended economies across the world, the average interest rate for a 30-year fixed-rate mortgage for 2019 was 3.94%. The average rate for 2021 was 2.96%, the lowest annual average in 30 years.

The historic drop in interest rates means homeowners who have mortgages from 2019 and older could potentially realize significant interest savings by refinancing with one of today’s lower interest rates. When considering a mortgage or refinance, it’s important to take into account closing costs such as appraisal, application, origination and attorney’s fees. These factors, in addition to the interest rate and loan amount, all contribute to the cost of a mortgage. 

How Credible mortgage rates are calculated

Changing economic conditions, central bank policy decisions, investor sentiment and other factors influence the movement of mortgage rates. Credible average mortgage rates and mortgage refinance rates reported in this article are calculated based on information provided by partner lenders who pay compensation to Credible.

The rates assume a borrower has a 700 credit score and is borrowing a conventional loan for a single-family home that will be their primary residence. The rates also assume no (or very low) discount points and a down payment of 20%.

Credible mortgage rates reported here will only give you an idea of current average rates. The rate you actually receive can vary based on a number of factors.

Can I get a mortgage with bad credit?

Credit scores are a snapshot of your credit history, and they usually range from 300 to 850. FICO, a widely used credit-scoring model, breaks down credit scores this way:

  • Poor: 579 or less
  • Fair: 580 to 669
  • Good: 670 to 739
  • Very good: 740 to 799
  • Exceptional: 800 or more

To qualify for a conventional loan — one that’s not insured by any government agency — you’ll usually need a fair credit score of at least 620. But it’s possible to qualify for FHA loans, which are insured by the Federal Housing Administration, with a poor credit score as low as 500. 

And Department of Veterans Affairs loans, which are for veterans, active-duty service members, and their spouses, have no minimum credit score requirements. United States Department of Agriculture loans, which help very low-income Americans buy in certain rural areas, also have no minimum credit score requirements.

If you’re trying to find the right mortgage rate, consider using Credible. You can use Credible's free online tool to easily compare multiple lenders and see prequalified rates in just a few minutes.

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