Current Mortgage Interest Rates, August 1, 2022 | Rates Continue Decline After Fed Meeting

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In 2022, mortgage rates rose nearly to levels not seen since before the pandemic, after nearly two years of record-low rates.
The refinance or purchase of your home doesn’t have to be put on hold. Although rates are higher than they were in 2021, 30-year fixed rates are still close to rates from a few years ago.

The fact is, a homebuyer’s decision involves a lot more than just an interest rate. It’s a lifestyle decision. In spite of the impact of the interest rate market on mortgages, it is not wise to base your decision solely on a few basis points. What’s most important to consider is to set a realistic homebuying budget and stick to it.

Let’s look at current mortgage rates, previous rates, and what all this means for borrowers.

A variety of notable mortgage rates sank today. The impressive decline in 30-year fixed mortgage rates is making headlines, but don’t forget about fixed 15-year rates, which also declined. At the same time, average rates for 5/1 adjustable-rate mortgages (ARM) also dwindled.

Mortgage rates currently are:

Mortgage Rate Forecast: Why Do Mortgage Rates Change?

Various economic factors have led to an increase in mortgage rates this year. Persistently high inflation is a big reason, Jacob Channel, senior economic analyst at LendingTree told us. According to the Bureau of Labor and Statistics June inflation report, inflation recently reached 9.1%, its highest level in 40 years. Because inflation remained higher than expected, the Federal Reserve increased its benchmark short-term rate by 50 basis points in May, then by 75 basis points in June, and the July rate hike is expected to be another 75 points.

A spike in mortgage rates preceded the Fed’s announcement after the inflation report was released. “I think what we’re seeing is that lenders had already anticipated that the Fed was going to raise the Fed funds rate by 75 basis points and they began to preemptively push mortgage rates up,” Jacob Channel, senior economist at LendingTree, told us.

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

Current Mortgage Rates: Are They Good For Buying a Home Right Now?

Even with the recent dramatic increases, mortgage rates remain at normal levels and are still considered historically favorable.

But the overall cost of homeownership is now rising with rising rates. With a combination of limited supply of homes, prices are up significantly from before the pandemic. The massive demand from buyers and higher costs to build homes is also contributing to the surge.

The difference of a point or so can mean a lot of money over a 30-year mortgage. But experts advise against trying to time the market to get the best mortgage rate. It’s more important to focus on finding the right house, and do it when your personal lifestyle and financial situation indicate it’s the right time.

Mortgage lenders rates can vary significantly. In order to get the best deal, shop around between a few different mortgage lenders. Be sure to get quotes from different lenders to ensure you’re getting the best deal, experts say. “The rate highly impacts your monthly affordability for as long as you will hold this home,” Skylar Olsen, principal economist at Tomo, a digital real estate and mortgage company, told us. “It is actually a critical piece of this decision, and that takes shopping around.”

Pay Attention to Loan Fees

If you take out a mortgage, your decision should factor in the loan’s closing costs. These fees include loan origination fees, prepaid interest, and property taxes, and can range from 3 to 6% of the loan amount.. One way to reduce your out of pocket costs, if to accept a higher interest rate in exchange for lender credits. You can save money in the short term by using this strategy, so don’t overlook it if you plan on selling your house or refinancing in five to eight years.

Current Mortgage Refinance Rates

There’s good news if you’ve been considering a refinance because the mean rates for 15-year fixed and 30-year fixed refinance loans sank. If you’ve been considering a 10-year refinance loan, just know average rates also saw a decrease.

Take a look at today’s refinance rates:

Here are mortgage rates for different styles of loan.

30-Year Fixed Mortgage Interest Rates

For a 30-year fixed-rate mortgage, the average rate you’ll pay is 5.28%, which is a decrease of 37 basis points from last week.

15-Year Fixed Mortgage Interest Rates

The median rate for a 15-year fixed mortgage is 4.61%, which is a decrease of 26 basis points from the same time last week.

A 15-year, fixed-rate mortgage’s monthly payment is, undeniably, a much bigger monthly payment than what you’d get with a 30-year mortgage offering the same interest rate. However, 15-year loans have some considerable benefits: You’ll pay thousands less in interest and pay off your loan much faster.

5/1 ARM Rates

A 5/1 ARM has an average rate of 4.09%, a decrease of 11 basis points from the same time last week.

An ARM is ideal for borrowers who will sell or refinance before the rate changes. If that’s not the case, their interest rates could end up being markedly higher after a rate adjusts.

For the first five years, a 5/1 ARM will typically have a lower interest rate compared to a 30-year fixed mortgage. Keep in mind that your rate could climb higher and your payment might grow by hundreds of dollars a month.

How We Determine Mortgage Interest Rates

To see where mortgage rates are moving, we rely on information collected by Bankrate, which is owned by the same parent company as NextAdvisor. The daily rates survey focuses on mortgages where the borrower has a high credit score (740+), 20% equity or more, and lives in the home.

This table has current average rates based on information provided to Bankrate by lenders from across the country:

Today’s mortgage interest rates
Loan termToday’s RateLast weekChange
30-year mortgage rate5.28%5.65%-0.37
15-year fixed rate4.61%4.87%-0.26
30-year jumbo mortgage rate5.21%5.60%-0.39
30-year mortgage refinance rate5.27%5.59%-0.32

Rates accurate as of August 1, 2022.

Pro Tip

Use NextAdvisor’s mortgage calculator to see how your mortgage payment changes based on elements like your mortgage rate, loan term, and down payment.

Mortgage Rate Frequently Asked Questions (FAQ):

How Do I Get the Best Mortgage Rate?

Shopping around for a mortgage is a great way to qualify for the lowest rate.

Your mortgage rate depends on a variety of factors lenders consider when assessing how likely you are to repay your home loan. Your credit score is a big part of this decision. And your loan-to-value (LTV) ratio is also important, so having a larger down payment is better for your mortgage rate.

But banks will look at your situation differently. So you can provide the same documentation to three different mortgage providers, and find that none of the mortgage rates and fees you are offered are the same.

Should I Lock in My Mortgage Rate Now?

It’s impossible to know what direction mortgage rates will go from day to day. That’s why a mortgage rate lock is such a useful tool because it protects you if rates go up. And with interest rates being relatively low right now, you should lock in your rate as soon as you can.

When you lock in your rate, ask your lender how long the lock is valid for. A rate lock can be good for anywhere from 30 to 60 days, which typically will give you enough time to close before the lock expires. If something happens where you need to extend your rate lock, ask about fees as many lenders charge a fee for extending a rate lock.