The 30-year average fixed mortgage rate is more than half a percentage point lower than it was two weeks ago. Rates have been volatile in recent weeks, but have generally been on a downward trend as markets braced for a possible recession.
The Federal Reserve raised its federal funds rate to try to tame inflation, and many now fear it will not be able to do so without slowing the economy too much.
Some have even speculated that we are already in a recession, pointing to the fact that gross domestic product has fallen for two consecutive quarters. But on Friday, the Bureau of Labor Statistics announced that the United States added 528,000 jobs in July, a figure well above what many economists had expected.
Mortgage rates may remain volatile as the results of the Fed rate hikes continue to manifest.
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 rates and terms, you will also understand how much you will pay for the entire term of your mortgage.
Your estimated monthly payment
- Pay a 25% a higher down payment would save you $ 8,916.08 on interest expense
- Lower the interest rate by 1% would save you $ 51,562.03
- By paying a supplement $ 500 each month would reduce the loan term by 146 months
Click “More Details” for tips on how to save on your long-term mortgage.
Fixed mortgage rates at 30 years
The current 30-year average fixed mortgage rate is 4.99%, according to Freddie Mac. That’s a decrease from last week, when it was 5.3%, and the second consecutive week that rate has dropped.
The 30-year fixed rate mortgage is the most common type of home loan. With this type of mortgage, you will pay back what you have borrowed in 30 years and your interest rate will not change over the life of the loan.
The 30-year long 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 will get a higher rate than you would with shorter terms or adjustable rates.
Fixed 15-year 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 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 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 will have a higher monthly payment than you would have with a longer term.
5/1 Adjustable Mortgage Rates
The average adjustable mortgage rate of 5/1 is 4.25%, down slightly from the previous week. This is the third consecutive week that this rate 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 fixed mortgage rates. A 5/1 ARM is a 30-year mortgage. For the first five years you will have a flat rate. After that, your rate will be changed once a year. If the rates are higher when your rate is changed, you will have a higher monthly rate than what you started with.
If you are considering an ARM, make sure you understand how much your rate might rise each time it adjusts and how much it might eventually rise over the life of the loan.
Are Mortgage Rates Going Up?
Mortgage rates have started 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 grown by 9.1%. The Federal Reserve has been working to keep inflation in check and expects to raise the federal funds target rate three more times this year, following increases in March, May, June and July.
While not directly tied to the federal funds rate, mortgage rates are sometimes pushed up due to Fed rate hikes and investor expectations of how those hikes will impact the economy. If inflation remains high, mortgage rates could stay at current levels or even rise. But when a recession becomes more likely, mortgage rates could decline.
How do I find personalized mortgage rates?
Some mortgage lenders allow you to customize the mortgage rate on their websites by entering the down payment amount, zip code, and credit score. The resulting rate isn’t set in stone, but it can give you an idea of how much you’ll pay.
If you’re ready to start buying homes, you can request pre-approval from a lender. The lender takes a hard credit drawdown and looks at the details of your finances to lock in a mortgage rate.
How Do I Compare Mortgage Rates Between Lenders?
It is possible to apply for pre-qualification with multiple credit institutions. A lender takes a general look at your finances and gives you an estimate of the rate you will pay.
If you are further along in the home buying process, you have the option to apply for pre-approval from several lenders, not just one company. By receiving letters from more than one lender, you can compare personalized rates.
Applying for pre-approval requires hard credit. Try to apply with multiple lenders within a few weeks, because concentrating all your hard credits in the same amount of time will hurt your credit score less.