Mortgage of the day, refinancing rate: August 17, 2022

Fixed mortgage rates have seen very little movement so far this week. The average 30-year fixed rate has remained close to 5% for more than a week.

Mortgage rates have risen more than two percentage points year over year and have been very volatile in recent months. Inflation has helped push rates up, but the current economic uncertainty has caused them to fluctuate as investors speculate on the likelihood of a recession.

Fluctuations in mortgage rates can make it difficult for homebuyers to know when in the home buying process to lock in their rates. While it’s possible you’ll end up saving money while waiting for another rate cut, with such volatility, consider the risk of taking a higher rate.

“If it fits your budget and meets short- and long-term financial goals, don’t wait,” says Steve Kaminski, head of U.S. residential lending at TD Bank. “If there is a large movement after you lock 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.

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$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 5.22%, according to Freddie Mac. This is an increase from last week, when it was 4.99%. This is the first week that this rate has increased after two consecutive weeks of decline.

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 long 30-year term allows you to spread your payments out over a long period, which means you can keep your monthly payments lower and more manageable. The trade-off 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 4.59%, an increase from the previous week, according to data from Freddie Mac. Last week, this rate was 4.26%.

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 4.43%, an increase from the previous week. Prior to this week’s increase, that rate had fallen for three weeks in a row.

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 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 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 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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