Mortgage rates have been trending down recently and are now hovering around 5%. Though softening rates are a good sign for homebuyers, the average 30-year fixed mortgage rate is still at its highest level since 2009.
If you’re considering buying a home, elevated rates shouldn’t necessarily deter you. Consider your overall financial situation and how homeownership fits into that.
“While the current market conditions may seem difficult, there’s still opportunities for those are ready to buy, and current rate levels don’t automatically mean you should sit out the market entirely,” says Robert Heck, vice president of mortgage at Morty. “We’re also seeing record-high rent increases and fierce competition for rentals across many markets, which means that buying may present a strong alternative, depending on your financial situation, location, and the amount of time you plan to be in your home . “.”
Mortgage rates today
Mortgage refinance rates today
By plugging in different rates and term lengths, you’ll also understand how much you’ll pay over the entire length of your mortgage. By plugging in different rates and term lengths, you’ll also understand how much you’ll pay over the entire length of your mortgage.
Your estimated monthly payment
- Paying a twenty five% higher down payment would save you $ 8,916.08 on interest charges
- Lowering the interest rate by 1% would save you $ 51,562.03
- Paying an additional $ 500 each month would reduce the loan length by 146 months
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 30-year fixed mortgage rate is 5.25%, according to Freddie Mac. This is the first week this rate has decreased since late April, when it just barely inched down from 5.11% to 5.10%. Prior to that, rates had been rising consistently since early March, when they were still below 4%.
With this type of mortgage, you’ll pay back what you borrowed over 30 years, and your interest rate won’t change for the life of the loan.
The lengthy 30-year term allows you to spread out 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’ll have a higher rate than you would with shorter terms or adjustable rates.
15-year fixed mortgage rates
The average 15-year fixed mortgage rate is 4.43%, a slight decrease from the prior week, according to Freddie Mac data. This is the second week in a row this rate has dropped.
If you want the predictability that comes with a fixed rate but are looking to spend less on interest over the life of your loan, a 15-year fixed-rate mortgage might be a good fit for you. Because these terms are shorter and have lower rates than 30-year fixed-rate mortgages, you could potentially save tens of thousands of dollars in interest. However, you’ll have a higher monthly payment than you would with a longer term.
5/1 adjustable mortgage rates
The average 5/1 adjustable mortgage rate is 4.08%. This is a slight increase from last week and marks the first time this rate has gone over 4% since 2018.
Adjustable rate mortgages can look very attractive to borrowers when rates are high, because the rates on these mortgages are typically lower than fixed mortgage rates. A 5/1 ARM is a 30-year mortgage. For the first five years, you’ll have After that, your rate will adjust once per year. If rates are higher when your rate adjusts, you’ll have a higher monthly payment than what you started with.
If you’re considering an ARM, make sure you understand how much your rate could go up each time it adjusts and how much it could ultimately increase over the life of the loan.
Are mortgage rates going up?
Mortgage rates started ticking up from historic lows in the second half of 2021, and may continue to increase throughout 2022. This is in large part due to high levels of inflation and policy response to rising prices.
In the last 12 months, the Consumer Price Index rose by 8.3%. The
has been working to get inflation under control, and plans to increase the federal funds target rate five more times this year, following a 0.25% increase at its March meeting and a 0.5% increase in May.
Though not directly tied to the federal funds rate, mortgage rates are often pushed up as a result of Fed rate hikes. As the central bank continues to tighten monetary policy to lower inflation, it’s likely that mortgage rates will remain elevated.
How do I find personalized mortgage rates?
Some mortgage lenders let you customize your mortgage rate on their websites by entering your
amount, zip code, and
. The resulting rate isn’t set in stone, but it can give you an idea of what you’ll pay.
If you’re ready to start shopping for homes, you may apply for preapproval with a lender. The lender does a hard credit pull and looks at the details of your finances to lock in a mortgage rate.