Current Mortgage Rates, September 19, 2022 | Rates Continue to Surge Ahead of Expected Fed Hike

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After nearly two years of record-low mortgage rates, 2022 started off with rates nearly rising to levels we haven’t seen since before the pandemic.

That doesn’t mean you need to cancel your home purchase plans. Yes, rates are higher than they were last year, but it’s important to keep in mind 30-year fixed rates are still close to where they were a few short years ago.

Besides, there’s a lot more that goes into a homebuying decision than just an interest rate. Buying a home is about making a lifestyle choice. While the interest rate market for mortgages can shape a decision, it’s wise to not base it solely on a few basis points on a mortgage rate. What’s most important to consider is to set a realistic homebuying budget and stick to it.

Let’s take a look at current mortgage rates, where rates have been in the past, and what it all means for the borrower.

A number of important mortgage rates all climbed up today. Both 30-year fixed and 15-year fixed mortgage rates grew. At the same time, average rates for 5/1 adjustable-rate mortgages (ARM) also had an upswing.

The average mortgage rates are as follows:

Mortgage Rate Forecast: What Drives Changes in Mortgage Rates?

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 July’s inflation report, year-over-year inflation reached 8.5%. There are signs inflation is starting to cool, since June’s 40-year-high 9.1%. Because inflation still remains 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 again by 75 points in July.

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?

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

Home prices are also on the rise, and as rates increase, that will also contribute to the rising cost of home ownership. Prices are up significantly from before the pandemic, with a combination of limited supply of homes, higher costs to build homes and massive demand from buyers leading to the surge.

It’s also important to remember that while mortgage rates are important, and the difference of a point or so can mean a lot of money over a 30-year mortgage, experts advise against trying to time the market to get the best mortgage rate. Focus on finding the right house, 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’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.”

Closing Costs & Loan Fees

The umbrella term for what you pay to take out a mortgage loan is closing costs. The fees for your appraisal, title insurance, and any lender origination charges are all part of your closing costs. Certain closing costs vary by loan size, but overall you can expert to pay 3% to 6% of the total loan balance.. Keeping track of your closing costs is crucial because a higher closing cost will result in a higher APR.

Looking at Today’s Mortgage Refinance Rates

Refinancing became a bit more expensive today as 30-year fixed and 15-year fixed refinance mortgages saw their average rates rise. Shorter term, 10-year fixed-rate refinance mortgages also moved up.

Take a look at today’s refinance rates:

Find current mortgage rates for today.

30-Year Mortgage Rates

The median interest rate for a standard, 30-year, fixed mortgage is 6.33%, which is an increase of 25 basis points from the previous week.

15-Year Fixed Mortgage Interest Rates

The median rate for a 15-year fixed mortgage is 5.63%, which is an increase of 23 basis points from the same time last week.

A 15-year, fixed-rate mortgage’s monthly payment is, without a doubt, 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 sooner.

5/1 ARM Mortgage Rates

A 5/1 ARM has an average rate of 4.76%, which is a climb of 23 basis points from seven days ago.

An adjustable-rate mortgage is ideal for households who will sell or refinance before the rate changes. If that’s not the case, their interest rates could end up being significantly 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 Calculate Our Mortgage Interest Rates

To get an idea of the current mortgage rate trends, 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 FICO score of 740 or more, a loan-to-value ratio (LTV) of 80% or better, and the home is occupied by the owner.

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

Current average mortgage interest rates
Loan typeInterest rateA week agoChange
30-year fixed rate6.33%6.08%+0.25
15-year fixed rate5.63%5.40%+0.23
30-year jumbo mortgage rate6.32%6.07%+0.25
30-year mortgage refinance rate6.32%6.08%+0.24

Updated on September 19, 2022.

Pro Tip

Use NextAdvisor’s mortgage calculator to see how your monthly payment changes based on things like your interest rate, homeowners insurance, and property taxes.

Mortgage Rate Frequently Asked Questions (FAQ):

How Do I Get the Lowest Mortgage Rate?

As you work to secure the absolute lowest mortgage interest rate you should focus on two main things: Credit score, and loan-to-value ratio (LTV)..

Having a credit score over 750 will help you qualify for the lowest rate. However, even a score 700 or higher can get you a worthwhile rate reduction compared to a lower credit score. Once your score starts climbing above 800, the interest rate discount won’t be meaningful.

Lenders give the biggest mortgage rate discounts to borrowers that are deemed less risky. One surefire way to show you’re a less risky borrower is to have a bigger down payment. A down payment of 20% or more will save you money in two ways: with a more favorable mortgage rate, and you’ll be able to avoid paying for private mortgage insurance (PMI).

Should I Lock in My Mortgage Rate Now?

Mortgage rates move up and down on a daily basis, and it’s impossible to time the market. So locking in your interest rate right now is a good idea because overall, rates are historically favorable.

A rate lock will only last for a set amount of time, typically 30-60 days. If you hit a snag during closing and it looks like your rate lock will expire you should talk with your lender. It may be able to extend the rate lock, however, you might have to pay a fee for that privilege.