The average 30-year fixed mortgage rate is more than half a percentage point lower now than it was two weeks ago. Interest rates have been volatile in recent weeks, but are generally trending lower as markets prepare for a possible recession.
The Federal Reserve is raising the federal funds rate to try to tame inflation, and many now fear it won’t be able to do so without slowing the economy too much.
Some even speculate that we are already in a recession, pointing to the fact that gross domestic product has declined for two quarters in a row. But on Friday, the Bureau of Labor Statistics said the U.S. added 528,000 jobs in July, which was much higher than many economists had expected.
Mortgage rates may remain volatile as the effects of the Fed’s rate hikes continue to play out.
Current mortgage rates
Current refinancing rates
Use our free mortgage calculator to see how today’s mortgage rates will affect your monthly payments. By linking different interest rates and terms, you’ll also understand how much you’ll pay over the life of your mortgage.
Your estimated monthly payment
- By paying a 25% a bigger down payment would save you $8,916.08 on interest
- Interest rate reduction by 1% he would save you $51,562.03
- Paying extra $500 each month would reduce the duration of the loan 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 4.99%, according to Freddie Mac. This is a decrease from last week, when it was 5.3%, and the second week in a row that percentage has decreased.
The 30-year fixed rate mortgage is the most common type of mortgage. With this type of mortgage, you’ll pay back what you borrowed over 30 years, and the interest rate won’t change for the life of the loan.
The long 30-year term allows you to spread your payments over a long period of time, which means you can keep your monthly payments lower and more manageable. The trade-off is that you’ll get a higher interest rate than you would with shorter terms or adjustable rates.
15 year fixed mortgage rates
The average 15-year fixed mortgage rate is 4.26 percent, down from last week, according to data from Freddie Mac. This is the second week in a row that this percentage has decreased.
If you want the predictability that comes with a fixed rate, but want to spend less in 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 will 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 4.25%, down slightly from last week. This is the third week in a row this percentage has declined.
Adjustable rate mortgages can look very attractive to borrowers when interest rates are high because the interest rates on these mortgages are usually lower than fixed rate mortgages. The 5/1 ARM is a 30-year mortgage. For the first five years, you will have a fixed interest rate. After that, your price will be adjusted once a year. If the charges are higher when you adjust your rate, you’ll have a higher monthly payment than you started with.
If you’re thinking about getting an ARM, make sure you understand how much the interest rate could increase each time it adjusts and how much it could ultimately increase over the life of the loan.
Are mortgage rates going up?
Mortgage rates began to rise from historic lows in the second half of 2021 and have risen significantly so far in 2022. More recently, rates have been relatively volatile.
Over the past 12 months, the Consumer Price Index has increased by 9.1%. The Federal Reserve is working to get inflation under control and plans to raise the target federal funds rate three more times this year, following hikes in March, May, June and July.
Although not directly tied to the federal funds rate, mortgage rates sometimes rise as a result of the Fed’s rate hikes and investors’ expectations of how those hikes will affect the economy. If inflation remains high, mortgage rates may remain at current levels or even rise. But as a recession becomes more likely, mortgage rates could fall.
How can 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 score. The resulting interest rate isn’t fixed, but it can give you an idea of what you’ll pay.
If you’re ready to start shopping for homes, you can apply for pre-approval with a lender. The lender does a hard credit check and looks at the details of your finances to lock in a mortgage rate.
How can I compare mortgage rates between lenders?
You can apply for default with multiple lenders. A lender takes a general look at your finances and gives you an estimate of the interest rate you will pay.
If you’re further along in the home buying process, you have the option to apply for pre-approval with multiple lenders, not just one company. By getting letters from more than one lender, you can compare individual rates.
Applying for pre-approval requires hard credit. Try to apply with multiple lenders within a few weeks because adding up all your hard credit pulls in the same amount of time will hurt your credit score less.