Today's mortgage and refinance rates: December 30, 2022

Insider's experts choose the best products and services to help make smart decisions with your money (here's how). In some cases, we receive a commission from our partners, however, our opinions are our own. Terms apply to offers listed on this page.

Mortgage rates will likely hold steady near their current levels for a bit before starting to trend down in the coming months. As inflation increased this year, so did mortgage rates. But now that the Federal Reserve appears to have gotten a handle on out-of-control price growth, mortgage rates are expected to ease throughout 2023 and 2024. However, we likely won't see rates drop to the historic lows borrowers enjoyed in 2020 and 2021. Today's mortgage rates Mortgage type Average rate today This information has been provided by Zillow.

See more mortgage rates on Zillow Today's refinance rates Mortgage type Average rate today This information has been provided by Zillow. See more mortgage rates on Zillow Mortgage calculatorUse our free mortgage calculator to see how today's mortgage rates will affect your monthly and long-term payments. By plugging in different term lengths and interest rates, you'll see how your monthly payment could change.Mortgage rate projection for 2023Mortgage rates started ticking up from historic lows in the second half of 2021 and have increased over three percentage points so far in 2022.

They'll likely remain near their current levels for the remainder of 2022.But many forecasts expect rates to begin to fall next year. In their latest forecast, Fannie Mae researchers predicted that 30-year fixed rates will trend down throughout 2023 and 2024.But whether mortgage rates will drop in 2023 hinges on if the Federal Reserve can get inflation under control.In the last 12 months, the Consumer Price Index rose by 7.1%. This is a significant slowdown compared to where inflation was earlier this year, which is a sign that mortgage rates may start coming down soon as well.If the Fed acts too aggressively and engineers a recession, mortgage rates could fall further than what current forecasts expect.

But rates probably won't drop to the historic lows borrowers enjoyed throughout the past couple of years.Should I get a HELOC? Pros and consIf you're looking to tap into your home's equity, a HELOC might be the best way to do so right now. Unlike a cash-out refinance, you won't have to get a whole new mortgage with a new interest rate, and you'll likely get a better rate than you would with a home equity loan.But HELOCs don't always make sense. It's important to consider the pros and cons.HELOC prosOnly pay interest on what you borrowTypically have lower rates than alternatives, including home equity loans, personal loans, and credit cardsIf you have a lot of equity, you could potentially borrow more than you could get with a personal loanHELOC consRates are variable, meaning your monthly payments could go upTaking equity out of your home can be risky if property values decline or you default on the loanMinimum withdrawal amount may be more than you want to borrowWhen will house prices come down?Home prices are starting to decline, but we likely won't see huge drops, even if there's a recession.The S&P Case-Shiller Home Price Index shows that prices are still up year-over-year, though they fell on a monthly basis in July, August, and September.

Fannie Mae researchers expect prices to decline 1.5% in 2023, while the MBA expects a 0.7% increase in 2023 and a 0.1% decrease in 2024.Sky high mortgage rates have pushed many hopeful buyers out of the market, slowing homebuying demand and putting downward pressure on home prices. But rates may start to drop next year, which would remove some of that pressure. The current supply of homes is also historically low, which will likely keep prices from dropping too far.What happens to house prices in a recession?House prices usually drop during a recession, but not always.

When it does happen, it's generally because fewer people can afford to purchase homes, and the low demand forces sellers to lower their prices.How much mortgage can I afford?A mortgage calculator can help you determine how much you can afford to borrow. Play around with different home prices and down payment amounts to see how much your monthly payment could be, and think about how that fits in with your overall budget.Typically, experts recommend spending no more than 28% of your gross monthly income on housing expenses. This means your entire monthly mortgage payment, including taxes and insurance, shouldn't exceed 28% of your pre-tax monthly income.The lower your rate, the more you'll be able to borrow, so shop around and get preapproved with multiple mortgage lenders to see who can offer you the best rate.

But remember not to borrow more than what your budget can comfortably handle.