The average 30-year fixed mortgage rate is over half a percentage point lower now than two weeks ago. Prices have been volatile in recent weeks, but have generally fallen as markets prepare for a possible recession.
The Federal Reserve has raised the federal funds rate to try 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, pointing to the fact that the gross domestic product has fallen for two quarters in a row. But on Friday, the Bureau of Labor Statistics announced that the U.S. added 528,000 jobs in July, which was well above what many economists had expected.
Mortgage rates may remain volatile as the results of Fed rate hikes continue to play out.
Current mortgage interest rates
Current refinancing interest rates
Use our free mortgage calculator to see how today’s mortgage rates will affect your monthly payments. By connecting different prices and terms, you will also understand how much you pay over the entire length of the mortgage.
Your estimated monthly payment
- Pays a 25% higher down payment will save you $8,916.08 on interest costs
- Lower the interest rate with 1% would save you $51,562.03
- Pays additionally $500 each month would reduce the length of the loan by 146 months
Click on “More details” for tips on how you can save money on the mortgage in the long term.
30-year fixed mortgage interest 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 decreased.
30-year fixed-rate mortgages are the most common type of mortgage. With this type of mortgage, you pay back what you have borrowed over 30 years, and your interest rate does not change during the life of the loan.
The long 30-year term allows you to spread your payments over a long period, meaning you can keep your monthly payments lower and more manageable. The trade-off is that you will have a higher rate than you would with shorter terms or adjustable rates.
15-year fixed mortgage interest
The average 15-year fixed mortgage rate is 4.26%, down from the previous week, according to Freddie Mac data. This is the second week in a row that this rate has decreased.
If you want the predictability that comes with a fixed rate, but want to spend less on interest over the term of the loan, a 15-year fixed rate loan may be a good fit for you. Because these terms are shorter and have lower interest rates than 30-year fixed-rate loans, you can 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 last week. This is the third week in a row that this rate has fallen.
Adjustable rate mortgages can look very attractive to borrowers when interest rates are high, because the interest 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 have a fixed interest rate. After that, your price will be adjusted once a year. If the rates are higher when the rates are adjusted, you will have a higher monthly payment than what you started with.
If you’re considering an ARM, make sure you understand how much your interest rate could go up each time it adjusts and how much it could ultimately increase over the life of the loan.
Are mortgage interest rates going up?
Mortgage rates started ticking up from historically low levels in the second half of 2021 and have increased significantly so far in 2022. Recently, rates have been relatively volatile.
In the last 12 months, the consumer price index has risen by 9.1%. The Federal Reserve has been working to bring 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 linked to the federal funds rate, mortgage rates are sometimes pushed up as a result of Fed rate hikes and investors’ expectations of how those hikes will affect the economy. If inflation remains high, mortgage rates may remain at current levels or even trend upwards. But as a recession becomes more likely, mortgage rates could fall.
How do I find custom 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 price isn’t set in stone, but it can give you an idea of what you’ll pay.
If you’re ready to start shopping for homes, you can apply for pre-approval from a lender. The lender does a hard credit pull and looks at the details of your finances to lock in a mortgage rate.
How do I compare mortgage rates between lenders?
You can apply for prequalification from several lenders. A lender takes a general look at your finances and gives you an estimate of the price you will pay.
If you are further along in the home buying process, you have the option of applying for pre-approval from several lenders, not just one company. By receiving letters from more than one lender, you can compare personal rates.
Applying for pre-approval requires a hard credit check. Try to apply with several lenders over the course of a few weeks, because gathering all of your hard credit at the same time will hurt your credit score less.