Average mortgage rates rose this week after two consecutive weeks of declines. The average 30-year fixed mortgage rate is now 5.51%. The average 15-year fixed and 5/1 adjustable mortgage rates also rose.
Prices started the week relatively high, but fell when the Bureau of Labor Statistics released its latest data for the consumer price index. The CPI report showed that prices rose even faster in June than they have been in previous months, with a year-on-year rate of 9.1%. Fear that such high inflation could lead to one
led to a slight decline in mortgage rates, although they have since risen again and now remain stable.
Today’s mortgage rates
Today’s refinancing rates
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Use our free mortgage calculator to see how today’s mortgage rates will affect your monthly and long term payments.
Your estimated monthly payment
- Pays one 25% higher payout would save you $ 8,916.08 on interest expenses
- Lower the interest rate with 1% would save you $ 51,562.03
- Paying additional 500 USD each month would reduce the loan length by 146 months
By joining different maturities and interest rates, you will see how your monthly payment can change.
Are mortgage rates rising?
Mortgage rates began to pick up from historic lows in the second half of 2021 and may continue to rise through 2022.
In the last 12 months, the consumer price index has risen by 9.1 per cent. That
has been working to bring inflation under control, and plans to raise the federal funds target rate four times more this year after increases in March, May and June.
Although not directly tied to federal funds interest rates, mortgage rates are often pushed up as a result of Fed rate hikes. As the central bank continues to tighten monetary policy to lower inflation, mortgage rates are likely to remain high.
What do high prices mean for the housing market?
As mortgage rates rise, homebuyers’ purchasing power declines as more of their expected housing budget has to go to pay interest. If prices become high enough, buyers may be priced completely out of the market, which cools demand and puts downward pressure on house price growth.
However, this does not mean that house prices will fall – in fact, they are expected to rise even more this year, just at a slower pace than what we have seen in the last few years.
What is a good mortgage rate?
It can be difficult to know if a lender is offering you a good interest rate, which is why it is so important to get pre-approved with more
and compare each offer. Apply for pre-approval with at least two or three lenders.
Your rate is not the only thing that matters. Be sure to compare both what your monthly costs would be, as well as your upfront costs, including any lender fees.
Although mortgage interest rates are strongly influenced by economic factors that are beyond your control, there are some things you can do to ensure you get a good interest rate:
- Consider fixed versus adjustable rates. You may be able to get a lower introductory rate with an adjustable rate loan, which can be good if you plan to move before the introductory period ends. But a fixed interest rate could be better if you buy a perpetual home because you do not risk your interest rate rising later. Look at the prices your lender offers and weigh your options.
- Look at your finances. The stronger your financial situation is, the lower your mortgage rate should be. Look for ways to boost your credit score or lower your debt relative to income if necessary. Saving for a higher payout also helps.
- Choose the right lender. Each lender charges different interest rates on mortgages. Choosing the right one for your financial situation will help you get a good price.