Current Mortgage Rates, August 24, 2022 | Rates checked

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In 2022, mortgage rates have nearly reached levels not seen since before the pandemic, after nearly two years of record high rates.

Refinancing or buying your home doesn’t have to be put on hold. Although rates are higher than they were a year ago, 30-year fixed rates are still close to rates a few years ago.

The fact is, a homebuyer’s decision involves more than just an interest rate. It’s a lifestyle decision. Despite the impact of the interest rate market on mortgages, it is not prudent to base your decision on just a few basis points. The most important thing to consider is setting a realistic home buying budget and sticking to it.

Let’s take a look at current mortgage rates, past rates, and what it all means for borrowers.

A number of major mortgage rates all went up today. The stunning growth in borrowing costs for 30-year fixed rate mortgages is notable, but 15-year fixed rates have also increased. We also saw an increase in the average 5/1 Adjustable Rate Mortgage (ARM) rate.

Mortgage rates are currently:

Mortgage Rate Trends: Why Are Mortgage Rates Changing So Quickly?

Various economic factors have caused mortgage rates to rise this year. Persistently high inflation is a big reason, Jacob Channel, senior economic analyst at LendingTree, told us. According to the July inflation report from the Bureau of Labor and Statistics, year-over-year inflation reached 8.5%. There are signs that inflation is beginning to ease, from June’s 9.1% peak in 40 years. As inflation is still higher than expected, the Federal Reserve raised its short-term key rate by 50 basis points in May, then by 75 basis points in June and again by 75 points in July.

A spike in mortgage rates preceded the Fed’s announcement after the release of the inflation report. “I think what we’re seeing is that lenders had already forecasted the Fed was going to raise the fed funds rate by 75 basis points and they started pushing mortgage rates up preemptively,” we said. says Jacob Channel, senior economist at LendingTree. .

“There are signs that some of the main drivers of inflation are easing, such as the drop in oil and other commodity prices in July, slowing wage growth and easing pressures on the chain. However, service price increases driven by housing and pent-up demand for vehicles will keep inflation high in the coming months,” said Dawit Kebede, senior economist at the Credit Union National Association, in a statement. release Energy prices are half responsible for these increases, he said.

What do today’s mortgage rates mean for your home buying plans?

Despite the dramatic increases, mortgage rates remain at relatively normal levels and are still considered historically favorable mortgage rates.

House prices are also on the rise, and as rates rise, this will also contribute to the rising cost of ownership. Prices have risen significantly from pre-pandemic levels, with a combination of limited supply of homes, higher construction costs and massive buyer demand driving the spike.

It’s also important to remember that while mortgage rates are significant and a difference of a point or two can mean a lot of money on a 30-year mortgage, experts advise against trying to time the market to get the best mortgage rate. Focus on finding the right home, and do it when your personal lifestyle and financial situation indicate it’s the right time.

Be sure to get quotes from different lenders to ensure you get the best deal, experts say. “The rate has a big impact on your monthly affordability as long as you keep that house,” Skylar Olsen, senior economist at Tomo, a digital real estate and mortgage company, told us. “It’s actually a critical part of that decision, and it requires shopping around.”

What to know about loan fees

Whenever you take out a home loan, your decision should factor in loan closing costs. These fees include loan origination fees, prepaid interest and property taxes, and can range from 3-6% of the loan amount. Choosing a higher interest rate in exchange for credit from the lender can lower your upfront costs. This strategy can save you money in the short term. So it’s worth thinking about if you plan to sell or refinance your home in the next five to eight years.

Current Mortgage Refinance Rates

Refinance rates made headlines today. We have seen an astonishing increase in rates for 30 year fixed loans. Interestingly, 15-year fixed rate refinances moved in the opposite direction and declined. Shorter-term, 10-year fixed-rate refinance mortgages also increased.

The refinancing averages for 30-year, 15-year and 10-year loans are:

Current mortgage rates.

30-year fixed mortgage interest rate

For a 30-year fixed-rate mortgage, the average rate you’ll pay is 5.87%, up 33 basis points from seven days ago.

15-year fixed mortgage rates

The median rate for a 15-year fixed mortgage is 5.08%, an increase of 19 basis points from the same period last week.

The monthly payment on a 15-year fixed rate mortgage is, undeniably, a much higher monthly payment than what you would get on a 30-year mortgage offering the same interest rate. But 15-year loans have significant advantages: you’ll save thousands of dollars in interest and pay off your loan much sooner.

ARM 5/1 tariffs

A 5/1 ARM has an average rate of 4.33%, which is an addition of 12 basis points from seven days ago.

A variable rate mortgage is ideal for borrowers who will refinance or sell before the rate changes. If not, their interest rates could end up being significantly higher after a rate adjustment.

For the first five years, a 5/1 ARM will typically have a lower interest rate than a 30-year fixed mortgage. Keep in mind that your payment could end up being several hundred dollars higher after a rate adjustment, depending on the terms of your loan.

How we calculate our mortgage rates

NextAdvisor mortgage rate averages are taken from Bankrate daily rate data. Bankrate is part of the same parent company as NextAdvisor.

Current average rates shown below and based on the Bankrate Mortgage Rate Survey:

Rates as of August 24, 2022.

Pro tip

Use our mortgage calculator to see how your monthly payment changes based on considerations such as your mortgage interest rate, loan term and down payment.

Frequently Asked Questions (FAQ) About Mortgage Rates:

How to benefit from the lowest mortgage rate?

There are two main elements to getting the best mortgage rate: the loan-to-value ratio (LTV) and your credit score.

Having a credit score above 750 will help you get the best rate. But, even a score of 700 or higher can get you a decent rate reduction compared to a lower credit score. Once your score begins to climb above 800, the interest rate reduction is negligible.

Lenders give the biggest mortgage rate discounts to homebuyers who are considered less risky. A larger down payment is a signal to lenders that you are more committed and less likely to stop making payments. A down payment of 20% or more will save you money in two ways: with a lower mortgage rate, and you can avoid paying for private mortgage insurance (PMI).

Is it a good time to lock in my mortgage rate?

It is impossible to know which direction mortgage rates will go from one day to the next. That’s why a mortgage rate lock is such a useful tool, because it protects you if rates go up. And since interest rates are relatively low right now, you should lock in your rate as soon as possible.

When you lock in your rate, ask your lender how long the lock will last. A rate lock can be good for 30-60 days, which will usually give you plenty of time to close before the lock expires. If you want to extend the rate lock, find out about fees, as many lenders charge a fee to extend a rate lock.

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