Mortgage of the day, refinancing rate: August 11, 2022

Mortgage rates remained relatively calm this week. Average 30-year fixed rates hovered just above 5%, which is higher than last week but lower than throughout July.

On Wednesday, the US Bureau of Labor Statistics released consumer price index data for July, which showed inflation finally started to ease.

The Federal Reserve has raised the federal funds rate to fight inflation, and the latest CPI data is a positive sign that its efforts may bear fruit. But some investors worry the Fed won’t be able to cool the economy without inadvertently triggering a recession. This made mortgage rates volatile.

Fluctuations in mortgage rates can make it difficult for homebuyers to know when in the process they should lock in their rates. While it’s possible you’ll end up saving money while waiting for rates to drop again, with such volatility you’ll avoid the risk of taking on a higher rate by locking in as soon as possible.

“If it fits your budget and meets your short- and long-term financial goals, don’t wait,” says Steve Kaminski, head of US residential lending at TD Bank. “If there’s a big move after you’ve locked in a rate, many lenders will offer a float option for a fee.”

Mortgage rates today

Mortgage refinance rates today

mortgage calculator

Use our free mortgage calculator to see the impact of today’s mortgage rates on your monthly payments. By plugging in different rates and terms, you’ll also understand how much you’ll pay over the life of your mortgage.

mortgage calculator

$1,161
Your estimated monthly payment

  • pay one 25% a higher down payment would save you $8,916.08 on interest charges
  • Lower the interest rate by 1% would save you $51,562.03
  • Pay an extra fee $500 each month would reduce the term of the loan by 146 month

Click “More Details” for tips on how to save money on your long-term mortgage.

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 this rate has fallen.

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 your interest rate won’t change for the life of the loan.

The 30-year long term lets you spread your payments out over a long period, which means you can keep your monthly payments lower and more manageable. The tradeoff is that you’ll get a higher rate than with shorter terms or adjustable rates.

15-year fixed mortgage rates

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 rate has decreased.

If you’re looking for 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 right for you. Since 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 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 the previous week. This is the third week in a row that this rate has fallen.

Variable rate mortgages can seem very attractive to borrowers when rates are high, as the rates on these mortgages are generally lower than fixed mortgage rates. A 5/1 ARM is a 30 year mortgage. For the first five years, you will have a fixed rate. After that, your rate will adjust once a year. If rates are higher when your rate adjusts, you’ll have a higher monthly payment than you started with.

If you’re considering an ARM, make sure you understand how much your rate might increase each time it adjusts and how much it might ultimately increase over the life of the loan.

Are mortgage rates increasing?

Mortgage rates began to recover 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 8.5%. The Federal Reserve has been struggling to keep inflation under control and plans to raise the target federal funds rate three more times this year, following increases in March, May, June and July.

Although not directly tied to the fed funds rate, mortgage rates are sometimes pushed higher due to Fed rate hikes and investors’ expectations of the impact of those hikes on the economy. .

Inflation remains high, but has started to slow, which is a good sign for mortgage rates and the economy in general.

How can I find personalized mortgage rates?

Some mortgage lenders allow you to customize your mortgage rate on their websites by entering your down payment amount, zip code and credit score. The resulting rate is not fixed, but it can give you an idea of ​​what you will pay.

If you’re ready to start buying homes, you can get pre-approved from a lender. The lender makes a firm credit application and reviews your financial details to lock in a mortgage rate.

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