Insider’s experts select the best products and services to help you make wise decisions with your money (here’s how). In some cases we receive a commission from our affiliates, however our opinion is our own. The conditions apply to the offers listed on this page.
Mortgage rates have risen sharply so far this week. As the US Federal Reserve continues to tighten monetary policy to bring down inflation, it is likely that mortgage rates will remain high for the foreseeable future.
“If inflation slows and the Fed can be less aggressive in raising interest rates, mortgage rates will fall to some degree,” said Melissa Cohn, regional vice president of William Raveis Mortgage. “We could take a break in the near future but the general trend is upwards for the rest of the year.”
Inflation has so far remained stubbornly high. The August CPI report showed prices up 8.3% year-on-year, down only slightly from July’s 8.5% and slowing less than most experts were expecting.
Mortgage rates today
Mortgage refinancing rates today
Use our free mortgage calculator to see how today’s mortgage rates would affect your monthly payments. By entering different interest rates and terms, you will also understand how much you will pay over the life of your mortgage.
Click More Details for tips on how to save money on your mortgage in the long run.
30 year fixed mortgage rates
The current average interest rate for 30-year fixed-rate mortgages is 6.29% Freddy Mac. This is the highest rate since 2008 and is the fifth consecutive week it has increased.
The 30-year fixed-rate mortgage is the most common form of home loan. With this type of mortgage, you pay back what you borrowed over 30 years, and your interest rate does not change over the life of the loan.
The long term of 30 years allows you to spread your payments over a long period of time, meaning you can keep your monthly payments lower and more manageable. The trade-off is that you have a higher rate than with shorter terms or adjustable rates.
15 year fixed mortgage rates
The average 15-year fixed-rate mortgage rate is 5.44%, up from the previous week, according to data from Freddie Mac. The last time this rate was over 5% was in 2009.
If you want the predictability of a fixed interest rate but want to spend less interest over the life of your loan, a 15-year fixed-rate mortgage may be right for you. Because these terms are shorter and have lower interest rates than 30-year fixed-rate mortgages, you could potentially save tens of thousands of dollars in interest. However, you have a higher monthly payment than with a longer term.
5/1 Adjustable Mortgage Rates
The average 5/1 mortgage rate is 4.97%, up slightly from last week.
Adjustable rate mortgages can be very attractive to borrowers when interest rates are high because interest rates on these mortgages are typically lower than interest rates on fixed-rate mortgages. A 5/1 ARM is a 30-year mortgage. You receive a fixed price for the first five years. After that, your tariff will be adjusted once a year. If the rates are higher when you adjust your rate, you’ll have a higher monthly payment than when you started.
If you’re considering an ARM, make sure you understand how much your interest rate could increase with each adjustment, and how much it could ultimately increase over the life of the loan.
Are mortgage rates rising?
Mortgage rates started rising from historic lows in the second half of 2021 and have risen significantly so far in 2022.
In the last 12 months, the consumer price index rose by 8.3%. The Federal Reserve has been working to bring inflation under control and plans to raise the federal funds rate twice more this year after raising it at its last five meetings.
While not directly tied to the federal funds rate, mortgage rates are sometimes pushed higher as a result of Fed rate hikes and investor expectations of how those increases will affect the economy.
Inflation remains high but has gradually slowed, which bodes well for mortgage rates and the broader economy.
How do I find personalized mortgage rates?
Some mortgage lenders allow you to adjust your mortgage rate on their websites by entering your down payment amount, zip code, and credit rating. The resulting rate isn’t set in stone, but it can give you an idea of what you’ll be paying.
When you’re ready to start buying houses, you can apply for pre-approval from a lender. The lender takes out a hard loan and looks at the details of your finances to secure a mortgage rate.
Read the original article on Business Insider