The average 30-year fixed mortgage rate is currently at its highest level in 13 years, according to Freddie Mac. Mortgage rates spiked in early 2022 and have continued to rise in May. However, the recent rate increases are not as dramatic as they have been in previous months, a sign that rate growth may be moderating.
If you’re getting ready to buy a home, fixing your rate sooner rather than later can help you insure against future increases while you shop.
“With such daily fluctuation, what you stand to lose is far more than you stand to gain by not locking in your interest rate,” says Ralph DiBugnara, president of Home Qualified and senior vice president of Cardinal Financial.
mortgage rates today
Mortgage Refinance Rates Today
Use our free mortgage calculator to see how current interest rates will affect your monthly payments.
Your estimated monthly payment
- paying a 25% a higher down payment would save you $8,916.08 on interest charges
- Lower the interest rate in 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.
Will mortgage rates go up in 2022?
To help the US economy during the COVID-19 pandemic, the
aggressively purchased assets, including mortgage-backed securities. This helped keep mortgage rates at record lows.
However, the Fed now plans to reduce the assets it holds and is expected to raise the fed funds rate a further five times in 2022, following hikes in March and May.
Average mortgage rates have risen recently, and Federal Reserve announcements indicate mortgage rates will likely continue to rise in 2022. You may want to lock in a rate now rather than risk a higher rate later, but don’t be too quick. to buy a house if you’re not ready.
What is a fixed rate mortgage versus an adjustable rate mortgage?
Historically, adjustable mortgage rates tend to be lower than 30-year fixed rates. When mortgage rates go up, ARMs can start to look like the best deal, but it depends on your situation.
Fixed-rate mortgages lock in your rate for the life of your loan. Adjustable rate mortgages lock in your rate for the first few years, then your rate goes up or down periodically.
Because adjustable rates start low, they are worthwhile options if you plan to sell your home before the interest rate changes. For example, if you get a 7/1 ARM and want to move out before the seven-year fixed-rate period ends, you won’t risk paying a higher rate later.
But if you want to buy a home forever, a fixed rate might still be a better option, since you won’t risk your rate going up in a few years.