Mortgage and refinancing rates today: August 6, 2022

The average 30-year fixed mortgage rate is now more than half a percentage point lower than it was two weeks ago. Rates have been volatile in recent weeks, but have generally tended to decline as markets prepare for a possible recession.

The Federal Reserve is raising the federal funds rate in an attempt to contain inflation, and many now fear that it will not be able to do so without slowing the economy too much.

Some have even speculated that we are already in recession, pointing to the fact that gross domestic product has fallen two-quarters in a row. But on Friday, the Bureau of Labor Statistics announced that the United States had added 528,000 jobs in July, well above many economists’ expectations.

Mortgage rates may remain volatile as the results of Fed rate hikes continue to play out.

Current mortgage rates

Current refinancing rates

Mortgage calculator

Use our free mortgage calculator to see how today’s mortgage rates will affect your monthly payments. By listing the different rates and loan durations, you’ll also understand how much you’ll pay off over the life of your mortgage.

Mortgage calculator

Your estimated monthly payment

  • Payment 25% a higher advance would save you $ 8,916.08 on interest charges
  • Lowering the interest rate by 1% to save you $ 51,562.03
  • Paying extra PLN 500 each month would shorten the loan period by 146 months

Click “More Details” for tips on how to save money on a mortgage in the long run.

30-year fixed interest rate mortgage

According to Freddie Mac, the current average 30-year fixed mortgage rate is 4.99%. This is a decline from last week when it was 5.3%, and it fell for the second consecutive week.

The most popular type of home loan is the 30-year fixed rate mortgage. With this type of mortgage, you will pay back what you borrowed over 30 years and your interest rate will not change throughout the term of the loan.

A long 30-year period allows you to spread your payments over a long period, which means your monthly payments will be lower and more manageable. The trade-off is that you will have a higher rate than for shorter terms or regulated rates.

15-year fixed interest rate mortgage

According to Freddie Mac, the average 15-year fixed mortgage rate is 4.26%, down from the week before. It is the second week in a row that this indicator has dropped.

If you want the predictability that comes with a fixed rate, but want to spend less on interest over the life of your loan, a 15-year fixed rate mortgage might be a good option for you. Because these terms are shorter and have lower interest rates than 30-year fixed-rate mortgages, you could potentially save tens of thousands of dollars in interest. However, the monthly payment will be higher than for the longer period.

5/1 adjustable mortgage rate

The average regulated 5/1 mortgage rate is 4.25%, a slight decline from the previous week. This is the third week in a row that the rate has dropped.

Floating rate mortgages can look very attractive to borrowers when interest rates are high as these mortgage rates tend to be lower than fixed rate mortgages. ARM 5/1 is a 30-year mortgage. You will have a flat rate for the first five years. Thereafter, the rate will be adjusted once a year. If your rates are higher when your rate changes, your monthly payment will be higher than what you started with.

If you are considering an ARM, make sure you understand how much your rate can increase each time it changes and how much it can increase over the life of the loan.

Are mortgage rates going up?

Mortgage rates started to rise from historic lows in the second half of 2021 and have so far increased significantly in 2022. Recently, rates have been relatively volatile.

Over the last 12 months, the consumer price index has increased by 9.1%. The Federal Reserve is working to contain inflation and plans to triple its federal funds rate target this year, following increases in March, May, June and July.

While not directly related to the federal funds rate, mortgage rates are sometimes raised as a result of Fed rate hikes and investor expectations as to how these increases will affect the economy. If inflation remains elevated, mortgage rates may remain at their current levels and may even increase. However, as the likelihood of a recession increases, mortgage rates may decline.

How do 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 final rate isn’t fixed, but it can give you an idea of ​​how much you’ll pay.

If you are ready to start buying homes, you can apply for pre-approval to the lender. The lender takes a heavy loan and checks the details of your finances to lock in your mortgage interest.

How do I compare mortgage rates between lenders?

You can apply for pre-qualification with multiple lenders. The lender looks at your finances and gives you an estimate of the rate you will pay.

If you are at an advanced stage in the home buying process, you have the option to apply for pre-approval with multiple lenders, not just one company. When you receive letters from more than one lender, you can compare personalized rates.

Applying for pre-approval requires hard creditworthiness. Try to apply with multiple lenders within a few weeks as tossing all of your hard loans into one piece of time will reduce your credit score.

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