The average 30-year fixed mortgage rate fell below 5% for the first time since early June. While lower rates may give hopeful homebuyers some respite after months of steep increases, they explain that they are falling due to the current uncertainty in the economy.
The Federal Reserve has raised interest rates to fight inflation, and some investors and economists fear that if it raises rates too high too quickly, it could trigger a recession. This fear has led to a downward trend in mortgage rates.
Mortgage rates today
Mortgage refinance rates today
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.
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 5.3%, according to Freddie Mac. This is a decrease from last week, when it was 5.54%.
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 4.58%, down from the previous week, according to data from Freddie Mac.
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 4.29%, down from the previous week.
Variable rate mortgages can seem very attractive to borrowers when rates are high, as the rates on these mortgages are usually 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 started to recover from historic lows in the second half of 2021 and could continue to rise throughout 2022. This is largely due to high levels of inflation and the policy response to rising prices.
Over the past 12 months, the consumer price index has increased by 9.1%. The Federal Reserve has been struggling to keep inflation in check 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 often pushed higher due to Fed rate hikes and investor expectations of the impact of those hikes on the economy. . As inflation remains elevated and the central bank continues to tighten monetary policy, mortgage rates are likely to stay at current levels. However, if rate hikes slow the economy so much that it enters a recession, mortgage rates could fall.
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.