Today’s Mortgage, Refinancing Rates: August 6, 2022

The average 30-year fixed mortgage rate is now over half a percentage point lower than it was two weeks ago. Prices have been volatile in recent weeks, but have generally moved downwards as markets prepare for a potential recession.

The Federal Reserve has raised Federal Funds interest rates to try to tame inflation, and many now fear it won’t be able to do so without slowing the economy too much.

Some have even speculated that we are already in a recession, suggesting that gross domestic product has fallen for two quarters in a row. But on Friday, the Bureau of Labor Statistics announced that the US added 528,000 jobs in July, far more than many economists had expected.

Mortgage rates may remain volatile as the results of Fed rate hikes continue to evolve.

Current mortgage interest

Current refinancing rates

Mortgage calculation

Use our free mortgage calculator to see how current mortgage interest rates affect your monthly payments. By entering different rates and terms, you also understand how much you will pay over the entire term of your mortgage.

Mortgage calculation

Your Estimated Monthly Payment

  • pay a 25% higher deposit would save you! $8,916.08 on interest charges
  • Reduction of interest by 1% would you save $51,562.03
  • Pay extra $500 each month would reduce the length of the loan by 146 months

Click “More Details” for tips on saving money on your mortgage in the long run.

30 year fixed mortgage rate

The current average 30-year fixed mortgage rate is 4.99%, according to Freddie Mac. This is down from last week when it was 5.3%, and the rate has fallen for the second week in a row.

The 30-year fixed-rate mortgage is the most common type of mortgage. With this type of mortgage, you pay back what you have borrowed in 30 years and your interest rate does not change over the life of the loan.

The long 30-year maturity allows you to spread your payments over a long period of time, keeping your monthly payments lower and more manageable. The downside is that you have a higher rate than with shorter terms or adjustable rates.

15 year fixed mortgage rate

The average 15-year fixed mortgage rate is 4.26%, down from the previous week, according to data from Freddie Mac. This is the second consecutive week that this percentage has fallen.

If you want the predictability that comes with a fixed rate, but want to spend less on 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 rates than 30-year fixed-rate mortgages, you can potentially save tens of thousands of dollars in interest. However, you will have a higher monthly payment than with a longer term.

5/1 adjustable mortgage rate

The average 5/1 adjustable mortgage rate is 4.25%, a slight decrease from the previous week. This is the third week in a row that this percentage has fallen.

Adjustable-rate mortgages can seem very attractive to borrowers when rates are high, because the rates on these mortgages are typically lower than the fixed-rate mortgage. A 5/1 ARM is a 30-year mortgage. You have a fixed rate for the first five years. After that, your rate will be adjusted once a year. If the rates are higher when your rate changes, you will have a higher monthly payment than you started with.

If you are considering an ARM, make sure you understand how much your rate could increase each time it adjusts and how much it could eventually increase over the life of the loan.

Will mortgage rates go up?

Mortgage rates started rising from historic lows in the second half of 2021 and have risen significantly so far in 2022. More recently, rates have been relatively volatile.

In the past 12 months, the consumer price index rose by 9.1%. The Federal Reserve has done its best to contain inflation and plans to raise the Federal Funds target three more times this year, following increases in March, May, June and July.

While not directly linked to Federal Funds rates, mortgage rates are sometimes pushed up as a result of Fed rate hikes and investor expectations about the impact of those hikes on the economy. If inflation remains high, mortgage interest rates may remain at current levels or may even rise. But as a recession becomes more likely, mortgage rates could fall.

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, zip code, and credit score. The resulting rate isn’t set in stone, but it can give you an idea of ​​what you’re paying.

When you’re ready to start buying homes, you can request pre-approval from a lender. The lender does a hard credit draw and looks at the details of your finances to fix a mortgage interest rate.

How do I compare mortgage rates between lenders?

You can request prequalification from multiple lenders. A lender will generally look at your finances and give you an estimate of the rate you will pay.

As you progress in the home buying process, you have the option to request pre-approval from several lenders, not just one company. Getting letters from more than one lender allows you to compare personalized rates.

Applying for pre-approval requires a hard credit draw. Try applying to multiple lenders within a few weeks, as lumping all your hard credit draws in the same amount of time will hurt your credit score less.

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