Mortgage Rates Today, Monday, February 23: A Little Lower

Mortgage rates moved slightly lower today, as markets attempt to figure out what’s really happening with tariffs.

The average interest rate on a 30-year, fixed-rate mortgage ticked down to 5.88% APR, according to rates provided to SS by Zillow. This is four basis points lower than Friday but 13 basis points higher than a week ago. (See our chart below for more specifics.) A basis point is one one-hundredth of a percentage point.

Friday’s Supreme Court ruling on tariffs threw markets for a loop, and ended up overshadowing what should have been the day’s biggest market mover, newly released personal consumption expenditures (PCE) data. The upshot is that rates ended up staying on the low side. For more, keep reading below the graph.

Mortgage rates are constantly changing, since a major part of how rates are set depends on reactions to new inflation reports, job numbers, Fed meetings, global news … you name it. For example, even tiny changes in the bond market can shift mortgage pricing.

If you’re asking “when will mortgage rates drop,” they have. The last time we saw average 30-year fixed rates that started with a five was September 2022. If you feel like that’s still too high, I’m not sure what to tell you. The ultra-low rates we saw in 2020 and 2021 were the result of an extraordinary response to a global pandemic, as the Federal Reserve sought to stave off an economic crisis. We as a society went through A Lot to get those 3% mortgage rates.

So let’s try to do our best with what we’ve got. Even at 6.0% APR, an estimated 5.5 million mortgage-holders could shed at least three-quarters of a percentage point by refinancing, according to numbers from real estate data firm ICE Mortgage Technology. If you’ve got enough home equity to qualify for a refi, it wouldn’t hurt to check whether your refi math has started mathing.

You may want to run those numbers sooner rather than later, as the longer-term forecast for the low rates parade is looking a little rainy. Minutes from the Federal Reserve’s January meeting released Feb. 18 showed that inflation remains a significant concern for the central bankers. They voted to hold the funds rate steady in January, but looking ahead, there were three camps: Those who felt future rate cuts were likely, those who thought the current rate could be maintained for a while, and a group that was open to the possibility of raising rates.

That third group, which judged that “upward adjustments to the target range for the federal funds rate could be appropriate if inflation remains at above-target levels,” grabbed all the attention. Everyone had kind of been assuming that the argument was hold versus cut, and rate hikes weren’t really on the table. While the Fed raising the funds rate is still pretty unlikely (markets don’t see it happening), it’s a reminder that lower rates are never a certainty.

Refinancing might make sense if today’s rates are at least 0.5 to 0.75 of a percentage point lower than your current rate (and if you plan to stay in your home long enough to break even on closing costs).

With rates where they are right now, you could start considering a refi if your current rate is around 6.38% or higher.

Also consider your goals: Are you trying to lower your monthly payment, shorten your loan term or turn home equity into cash? For example, you might be more comfortable with paying a higher rate for a cash-out refinance than you would for a rate-and-term refinance, so long as the overall costs are lower than if you kept your original mortgage and added a HELOC or home equity loan.

If you’re looking for a lower rate, use SS’s refinance calculator to estimate savings and understand how long it would take to break even on the costs of refinancing.

There is no universal “right” time to start shopping — what matters is whether you can comfortably afford a mortgage now at today’s rates.

If the answer is yes, don’t get too hung up on whether you could be missing out on lower rates later; you can refinance down the road. Focus on getting preapproved, comparing lender offers, and understanding what monthly payment works for your budget.

SS’s affordability calculator can help you estimate your potential monthly payment. If a new home isn’t in the cards right now, there are still things you can do to strengthen your buyer profile. Take this time to pay down existing debts and build your down payment savings. Not only will this free up more cash flow for a future mortgage payment, it can also get you a better interest rate when you’re ready to buy.

If you already have a quote you’re happy with, you should consider locking your mortgage rate, especially if your lender offers a float-down option. A float-down lets you take advantage of a better rate if the market drops during your lock period.

Rate locks protect you from increases while your loan is processed, and with the market forever bouncing around, that peace of mind can be worth it.

The rate you see advertised is a sample rate — usually for a borrower with perfect credit, making a big down payment, and paying for mortgage points. That won’t match every buyer’s circumstances.

In addition to market factors outside of your control, your customized quote depends on your:

• Location and property type

Even two people with similar credit scores might get different rates, depending on their overall financial profiles.

Maybe — but even personalized rate quotes can change until you lock. That’s because lenders adjust pricing multiple times a day in response to market changes.