Today’s Mortgage, Refinance Rates: May 11, 2022

Mortgage rates have hovered above 5% for several weeks. As inflation continues to be a problem and the

Federal Reserve

works to control rapid price growth, rates are likely to remain elevated.

Because rates are already high and may continue to rise, homebuyers will need to look for affordability where they can by searching for the lowest rate available, and once they find it, lock in that rate.

“Locking in a rate is usually non-binding, and you can always reassess your options as things go,” says Robert Heck, vice president of mortgages at Morty.

Mortgage rates today

Today’s Refinance Rates

mortgage calculator

Use our free mortgage calculator to see how current interest rates will affect your monthly payments:

mortgage calculator

Your estimated monthly payment

  • paying a 25% a higher down payment would save you $8,916.08 on interest charges
  • Reduce the interest rate on one% I would save you $51,562.03
  • Paying an additional $500 each month would reduce the length of the loan by 146 months

By clicking “More Details,” you’ll also see how much you’ll pay over the life of your mortgage, including how much goes toward principal versus interest.

Are mortgage rates going up?

Mortgage rates began to rise from record lows in the second half of 2021 and are likely to continue rising through 2022.

In March, the Consumer Price Index hit an annual rate of 8.5%, the highest rate of inflation since 1981. The Federal Reserve has been working to control inflation and plans to raise the federal funds target rate five more times this anus. after a 0.25% rise at its March meeting and a 0.5% rise in May.

Although not directly tied to the fed funds rate, mortgage rates often rise as a result of Federal Reserve rate increases. As the central bank continues to tighten monetary policy to reduce inflation, mortgage rates are likely to remain elevated.

What do high rates mean for the real estate market?

When mortgage rates rise, homebuyers’ purchasing power declines, as more of their anticipated housing budget has to go toward interest payments. If rates go high enough, buyers can be pushed out of the market altogether, cooling demand and putting downward pressure on home price growth.

However, that doesn’t mean home prices are going to fall; in fact, they’re expected to rise even higher this year, just at a slower pace than we’ve seen in the past two years.

Even though high rates slow demand, low inventory will continue to drive up prices, says Ralph DiBugnara, president of Home Qualified and senior vice president of Cardinal Financial.

“There is such a shortage that even if 50% of people stopped looking today, there would still be a huge demand,” he says. “So I think because of that demand, prices are going to go up for at least another 18 to 24 months.”

What is a good mortgage rate?

It can be hard to know if a lender is offering you a good rate, which is why it’s so important to get pre-approved with multiple

mortgage lenders

and compare each offer. Get pre-approved with at least two or three lenders.

Your rate is not the only thing that matters. Be sure to compare both what your monthly costs would be and your initial costs, including lender fees.

Although mortgage rates are heavily influenced by economic factors beyond your control, there are a few things you can do to ensure you get a good rate:

  • Consider fixed rates versus adjustable rates. You may be able to get a lower introductory rate with an adjustable-rate mortgage, which can be a good thing if you plan to move before the introductory period ends. But a fixed rate might be better if you’re buying a forever home because you won’t risk your rate going up later. Look at the rates your lender offers and weigh your options.
  • Look at your finances. The stronger your financial situation, the lower your mortgage rate should be. Look for ways to raise your credit score or lower your debt-to-income ratio, if necessary. Saving for a higher down payment also helps.
  • Choose the right lender. Each lender charges different mortgage rates. Choosing the right one for your financial situation will help you get a good rate.

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