Mortgage and refinance rates today, Jan. 21, and rate forecast for next week

January 21, 2023 - 7 min read

Today’s mortgage and refinance rates

Average mortgage rates nudged higher yesterday. Indeed, they moved just a little higher over the entire seven-day, Friday-evening-to-Friday-evening period.

Next week, mortgage rates will likely be determined mostly by that Friday’s big inflation report. However, some movement may also be generated by other reports and by traders jockeying for position ahead of the Federal Reserve’s next rate hike on Feb. 1. Assuming that the inflation report remains in line with recent ones, and shows price rises slowing, mortgage rates might fall next week.

Current mortgage and refinance rates

Program Mortgage Rate APR* Change
Conventional 30 year fixed
Conventional 30 year fixed 6.357% 6.39% +0.09%
Conventional 15 year fixed
Conventional 15 year fixed 5.244% 5.297% +0.01%
Conventional 20 year fixed
Conventional 20 year fixed 6.135% 6.19% +0.11%
Conventional 10 year fixed
Conventional 10 year fixed 5.411% 5.524% +0.04%
30 year fixed FHA
30 year fixed FHA 6.118% 6.859% +0.12%
15 year fixed FHA
15 year fixed FHA 5.459% 5.946% +0.04%
30 year fixed VA
30 year fixed VA 5.762% 5.989% +0.08%
15 year fixed VA
15 year fixed VA 6.181% 6.54% Unchanged
Conventional 5 year ARM
Conventional 5 year ARM 6.66% 6.898% +0.09%
5/1 ARM FHA
5/1 ARM FHA 6.66% 7.156% +0.1%
5/1 ARM VA
5/1 ARM VA 6.66% 7.156% +0.1%
Rates are provided by our partner network, and may not reflect the market. Your rate might be different. Click here for a personalized rate quote. See our rate assumptions here.


Should you lock a mortgage rate today?

Don't lock on a day when mortgage rates look set to fall. My recommendations (below) are intended to give longer-term suggestions about the overall direction of those rates. So, they don’t change daily to reflect fleeting sentiments in volatile markets.

Finally, I can change my personal rate lock recommendations. Yesterday, both the members of the Fed’s rate-setting committee who made speeches backed a smaller rate hike on Feb. 1. That doesn’t ensure a small increase, but it perhaps makes one more probable than a larger rise. (Read on for more.)

So, from today, those recommendations are:

  • LOCK if closing in 7 days
  • LOCK if closing in 15 days
  • FLOAT if closing in 30 days
  • FLOAT if closing in 45 days
  • FLOAT if closing in 60 days

However, with so much uncertainty at the moment, your instincts could easily turn out to be as good as mine — or better. So let your gut and your own tolerance for risk help guide you.

Why are the first two recommendations still to lock? Because there’s too much risk of volatility to take chances so near to closing. Of course, if you’re happy with that risk, float away.

What’s moving current mortgage rates

The biggest driver of changes in mortgage rates for some time to come is likely to be movements in general interest rates.

Yes, mortgage rates are largely determined by a specialist bond market in which mortgage-backed securities (MBSs) are traded. And, yes, the base for general interest rates is effectively set by the Federal Reserve. But Fed rate changes are hugely influential on the MBS market.

That’s why I’ve been tracking what top Fed officials have been saying this week about the next general rate hike, which is due on Feb. 1. I’ve counted public pronouncements by seven members of the Fed’s rate-setting body (the Federal Open Market Committee or FOMC) over the last three days. And five of those favored a small, 0.25% (25-basis-point) increase.

Of course, that doesn’t guarantee a small hike come the day. A 0.5% (50-basis-point) one is still possible.

How come? Well, to start with, the FOMC has 12 members and I’ve been counting only those who’ve spoken in public over the last three days. And, then, things might change during the committee’s next meeting, which begins Jan 31.

In particular, Fed Chair Jerome Powell has the most powerful and influential voice. And, the last I heard, he took a hawkish view on rate hikes. So, come the meeting, he might yet sway some of the five doves and others.

Still, there’s clearly a large body of doveish opinion within the FOMC. And its presence persuaded me to change my rate lock recommendations today. It’s so good to be able to be optimistic about mortgage rates again.

Things that might sour the Fed’s mood

There are a couple of economic reports next week that could swing the FOMC doves behind a larger rate hike. The first is Thursday’s first reading of gross domestic product (GDP) during the last quarter of 2022.

If growth was strong over that period, the Fed might worry that its bitter anti-inflation medicine (mostly rate hikes) weren’t slowing the economy as intended. And the central bank could feel the need to hang tough over the next rate increase.

The other crucial report lands on Friday. And it’s the personal consumption expenditures (PCE) price index for December.

This PCE index is the Fed’s preferred measure of inflation. And, were it to show that prices were rising more strongly again during December, that could persuade the FOMC to opt for a larger rate hike.

I’m optimistic that neither of those reports will create issues. We’ve already had the consumer price index (CPI) for December, and that showed price growth slowing — and, by one measure, prices actually standing still — that month. So, it would be strange were the PCE price index to show something radically different.

Economic reports next week

I covered in the last section the two economic reports most likely to make waves for mortgage rates next week.

Important reports and events are shown in bold in the following list. And I doubt any others will move mortgage rates far unless they reveal shockingly good or bad data.

  • Tuesday — January purchasing managers’ indexes (PMIs) from S&P for the manufacturing and services sectors
  • Thursday — Real GDP for the fourth quarter of 2022 (first reading). And December orders for durable goods and core capital goods. Plus initial jobless claims for the week ending Jan. 21
  • Friday — December’s PCE price index. And real disposable incomes and real consumer spending for the same month. Plus January’s consumer sentiment index

Look out for Thursday and Friday!

Mortgage interest rates forecast for next week

Finally, I’m relatively optimistic about mortgage rates over the coming few months. But there’s too much that’s unpredictable next week for me to judge where those rates will head over the next seven days.

I’m hoping they’ll fall. But we won’t know until the week’s big economic reports land.

How your mortgage interest rate is determined

Mortgage and refinance rates are generally determined by prices in a secondary market (similar to the stock or bond markets) where mortgage-backed securities are traded.

And that’s highly dependent on the economy. So mortgage rates tend to be high when things are going well and low when the economy’s in trouble. But inflation rates can undermine those tendencies.

Your part

But you play a big part in determining your own mortgage rate in five ways. And you can affect it significantly by:

  1. Shopping around for your best mortgage rate — They vary widely from lender to lender
  2. Boosting your credit score — Even a small bump can make a big difference to your rate and payments
  3. Saving the biggest down payment you can — Lenders like you to have real skin in this game
  4. Keeping your other borrowing modest — The lower your other monthly commitments, the bigger the mortgage you can afford
  5. Choosing your mortgage carefully — Are you better off with a conventional, conforming, FHA, VA, USDA, jumbo or another loan?

Time spent getting these ducks in a row can see you winning lower rates.

Remember, they’re not just a mortgage rate

Be sure to count all your forthcoming homeownership costs when you’re working out how big a mortgage you can afford. So, focus on your “PITI.” That’s your Principal (pays down the amount you borrowed), Interest (the price of borrowing), (property) Taxes, and (homeowners) Insurance. Our mortgage calculator can help with these.

Depending on your type of mortgage and the size of your down payment, you may have to pay mortgage insurance, too. And that can easily run into three figures every month.

But there are other potential costs. So you’ll have to pay homeowners association dues if you choose to live somewhere with an HOA. And, wherever you live, you should expect repairs and maintenance costs. There’s no landlord to call when things go wrong!

Finally, you’ll find it hard to forget closing costs. You can see those reflected in the annual percentage rate (APR) that lenders will quote you. Because that effectively spreads them out over your loan’s term, making that higher than your straight mortgage rate.

But you may be able to get help with those closing costs and your down payment, especially if you’re a first-time buyer. Read:

Down payment assistance programs in every state for 2021

Mortgage rate methodology

The Mortgage Reports receives rates based on selected criteria from multiple lending partners each day. We arrive at an average rate and APR for each loan type to display in our chart. Because we average an array of rates, it gives you a better idea of what you might find in the marketplace. Furthermore, we average rates for the same loan types. For example, FHA fixed with FHA fixed. The result is a good snapshot of daily rates and how they change over time.