After getting some temporary relief from record high rates in August, mortgage borrowers are once again dealing with higher rates.
Rates peaked in June, with the average 30-year fixed-rate mortgage rate at 5.81% — the highest level since 2008, according to Freddie Mac. Since then, rates have been trending downward, reaching an average of 4.99% in early August. But they are now on their way back.
The Federal Reserve has indicated that it will continue to raise the federal funds rate until inflation drops to a more acceptable level. This has helped raise mortgage rates.
With the rising cost of mortgages, many homebuyers have had to reassess their budgets and look for ways to keep their monthly payments affordable.
“Now is the time to seriously consider an adjustable rate mortgage or an interest-only option to help keep monthly payments low and as an ideal bridge to buying a home today — with a strong expectation that mortgage rates will drop once inflation is tamed,” says Sarah Alvarez, Vice President William Ravis Mortgage. “Our team has a saying that you marry a house but you have to set the price.”
Getting a mortgage where you pay less during the introductory period can help make home ownership easier when prices are high, but make sure you understand how the loan works and what the risks are. For example, if you are unable to refinance outside the scope adjustable mortgage Before resetting your rate, you may end up with a higher monthly payment.
Today’s Mortgage Rates
Today’s Refinance Rates
use Free Mortgage Calculator Find out how today’s mortgage rates will affect your monthly and long-term payments.
Estimated monthly payment
- pay 25% It will give you a higher down payment USD 8,916.08 on interest charges
- Reduce the interest rate by 1% will save you $51.562.03
- Pay extra 500 dollars Each month would reduce the term of the loan by 146 months
By plugging in different time periods and interest rates, you’ll see how your monthly payment can change.
Are Mortgage Rates Rising?
Mortgage rates have started to rise from historical lows in the second half of 2021 and have increased significantly so far in 2022. More recently, rates have been relatively volatile.
In the last 12 months, The consumer price index rose 8.5%.. The Fed has been working to control inflation, and plans to increase the federal funds target rate three more times this year, after increases in March, May, June and July.
Although not directly related to the federal funds rate, mortgage rates are sometimes raised as a result of higher Fed rates and investor expectations about how those hikes will affect the economy.
Inflation is still high, but it’s starting to slow, which is a good indicator of mortgage rates and the broader economy.
What do high rates mean for the housing market?
When mortgage rates rise, the purchasing power of home shoppers declines, as a greater portion of the projected housing budget must go to paying interest. If prices rise enough, buyers can exit the market altogether, which cools demand and puts downward pressure on home price growth.
However, this does not mean that housing prices will fall – in fact, they are It is expected to rise More this year, at a slower pace than we’ve seen in the past two years.
What is a good mortgage rate?
It can be difficult to know if a lender is offering you a good rate, which is why it is so important to get pre-approved with several mortgage lenders and to 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 each of your monthly costs as well as the initial costs, including any lender fees.
Although mortgage rates are heavily influenced by economic factors beyond your control, there are a few things you can do to help ensure that you get a good rate:
- Consider fixed rates versus adjustable rates. You may be able to get a lower introductory rate with an adjustable mortgage, which can be good if you plan to move before the introductory period is over. But fixed price may be better if you Buy a forever home Because you won’t risk the price going up later. Look at the rates offered by your lender and weigh your options.
- Look at your money. The stronger your financial position, the lower your mortgage rate. Find ways to boost your Balance level or lower your Debt to Income Ratio, if necessary. saving up push down Also helps.
- Choose the right lender. Each lender charges different mortgage rates. choose the right Your financial situation will help you get a good price.