The average interest rate for 30-year fixed-rate mortgages is now more than half a percentage point lower than two weeks ago. Interest rates have been volatile in recent weeks but have generally trended lower as markets prepare for a possible recession.
The Federal Reserve has raised the federal funds rate 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, citing that gross domestic product has fallen for two straight quarters. But on Friday, the Bureau of Labor Statistics said the US added 528,000 jobs in July, well above what many economists were expecting.
Mortgage rates could remain volatile as the results of Fed rate hikes continue to be felt.
Current mortgage rates
Current refinancing rates
Use our free mortgage calculator to see how today’s mortgage rates would affect your monthly payments. By entering different interest rates and terms, you will also understand how much you will pay over the life of your mortgage.
Your estimated monthly payment
- Pay a 25% you would save yourself a higher down payment $8,916.08 on interest charges
- interest rate reduction 1% would save you $51,562.03
- pay surcharge $500 each month would shorten the loan term 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
According to Freddie Mac, the current average 30-year fixed-rate mortgage rate is 4.99%. This is down from last week when it was 5.3% and is the second week in a row that rate has fallen.
The 30-year fixed-rate mortgage is the most common form of home loan. With this type of mortgage, you pay back what you borrowed over 30 years, and your interest rate does not change over the life of the loan.
The long term of 30 years allows you to spread your payments over a long period of time, meaning you can keep your monthly payments lower and more manageable. The trade-off is that you have a higher rate than with shorter terms or adjustable rates.
15 year fixed mortgage rates
The average 15-year fixed-rate mortgage rate is 4.26%, down from the previous week, according to data from Freddie Mac. This is the second straight week that this rate has fallen.
If you want the predictability of a fixed interest rate but want to spend less 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 have a higher monthly payment than with a longer term.
5/1 Adjustable Mortgage Rates
The average 5/1 mortgage rate is 4.25%, down slightly from last week. This is the third consecutive week this rate has fallen.
Adjustable rate mortgages can be very attractive to borrowers when interest rates are high because interest rates on these mortgages are typically lower than interest rates on fixed-rate mortgages. A 5/1 ARM is a 30-year mortgage. You receive a fixed price for the first five years. After that, your tariff will be adjusted once a year. If the rates are higher when you adjust your rate, you’ll have a higher monthly payment than when you started.
If you’re considering an ARM, make sure you understand how much your interest rate could increase with each adjustment, and how much it could ultimately increase over the life of the loan.
Are mortgage rates rising?
Mortgage rates started rising from historic lows in the second half of 2021 and have risen significantly so far in 2022. More recently, interest rates have been relatively volatile.
In the last 12 months, the consumer price index rose by 9.1%. The Federal Reserve has been working to bring inflation under control and plans to raise the federal funds rate three more times this year after raising it in March, May, June and July.
While not directly tied to the federal funds rate, mortgage rates are sometimes pushed higher as a result of Fed rate hikes and investor expectations of how those increases will affect the economy. If inflation remains high, mortgage rates may remain at current levels or even trend higher. But if 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 amount, zip code, and credit rating. The resulting rate isn’t set in stone, but it can give you an idea of what you’ll be paying.
When you are ready to start buying houses, you can apply for pre-approval from a lender. The lender takes out a hard loan and looks at the details of your finances to secure a mortgage rate.
How do I compare mortgage rates between lenders?
You can apply for prequalification from multiple lenders. A lender will take a general look at your finances and give you an estimate of the rate you will pay.
As you get further along in the home buying process, you have the option to apply for pre-approval from multiple lenders, not just one company. By receiving letters from more than one lender, you can compare personalized rates.
Applying for pre-approval requires a hard credit pulldown. Try to apply to multiple lenders within a few weeks because if you combine all of your hard loans into the same time period, it will hurt your credit score less.