Here are today’s mortgage rates, July 13, 2022 | prices increased
Almost two years have passed with record low mortgage rates. Now 2022 has begun with rates rising above pre-pandemic levels.
Don’t cancel your home buying plans just yet. Even if the rates are higher than in 2021, they are still considered “normal” from a historical perspective. Just a few years ago, 30-year fixed rates were in the high 5%.
Home buying decisions get a lot more consideration outside of the interest rate anyway. Buying a home is all about making a lifestyle choice. What’s happening in the interest rate market can influence a decision, it’s wise not to base it on just a few basis points of a mortgage rate. Setting and sticking to a realistic home buying budget is far more important than the rate you get.
Let’s take a look at current mortgage rates, where rates have historically been, and what it all means for the borrower.
Looking at today’s mortgage rates, some major interest rates have seen growth. Average values for both 30-year fixed-rate mortgages and 15-year fixed-rate mortgages have risen. The most common type of adjustable rate mortgage is the 5/1 adjustable rate mortgage (ARM), which has sunk lower.
Take a look at today’s prices:
Mortgage Rate Forecast: What’s Driving the Change in Mortgage Rates?
Various economic factors have caused mortgage rates to rise this year. Persistently high inflation is a big reason, Jacob Channel, senior economic analyst at LendingTree, told us. Inflation recently hit 8.6%, the highest level in 40 years, according to the Bureau of Labor and Statistics’ May inflation report. The Federal Reserve raised its short-term interest rate by 50 basis points in May and 75 basis points in June as inflation remained higher than expected.
A rise in mortgage rates preceded the Fed’s announcement following the release of its Inflation Report. “I think what we’re seeing is that lenders were already expecting the Fed to hike the fed funds rate by 75 basis points and they started raising mortgage rates preemptively,” Jacob Channel told us, Senior Economist at LendingTree.
“We have a lot of factors like this that are pushing mortgage rates up,” says Channel. Financial markets are still reacting to the COVID lockdown in China and Russia’s invasion of Ukrainian territory. “Volatility has gone through the roof,” Shashank Shekhar, founder and CEO of InstaMortgage, told us. “The market has adjusted to a new news cycle practically every day.”
Are Current Mortgage Rates Good for Buying a Home?
Even with recent dramatic increases, mortgage rates remain at normal levels and are still considered historically cheap.
But the total cost of owning a home is now increasing as rates rise. With a combination of limited housing supply, prices have increased significantly from before the pandemic. Massive demand from buyers and higher house construction costs are also contributing to the rise.
A difference of about a point can mean a lot of money on a 30-year mortgage. However, experts advise against trying to time the market to get the best mortgage rate. It’s more important to focus on finding the right home and to do so when your personal lifestyle and financial situation indicate the right time.
Mortgage bank interest rates can vary significantly. To get the best deal, look between a few different mortgage lenders. Get quotes from different lenders to make sure you’re getting the best deal, experts say. “The interest rate has a big impact on your monthly affordability as long as you own this house,” Skylar Olsen, chief economist at Tomo, a digital real estate and mortgage company, told us. “It’s actually a critical part of that decision, and to do that, you have to look around.”
What you should know about loan fees
When taking out a home loan, you should consider the closing cost of the loan when making your decision. Closing costs can range from 3-6% of the loan amount and include fees such as lending fees, prepaid interest and property taxes. One way to reduce your out-of-pocket expenses is to accept a higher interest rate in exchange for credit from the lender. This strategy can save you money in the short term, so it’s worth investigating the possibility of selling or refinancing the home in five to eight years.
Look at today’s mortgage refinancing rates
Refinancing got a bit more expensive today as 30-year fixed and 15-year fixed refinance mortgages saw an upward trend in their average interest rates. Short-term 10-year fixed-rate refinancing mortgages also rose.
The average refinancing rates are as follows:
Find out about mortgage rates that suit your individual needs.
Mortgage interest for 30 years
The average interest rate for 30-year fixed-rate mortgages is 5.69%, up 12 basis points from the previous week.
Interest rates for 15-year fixed-rate mortgages
The median interest rate for a 15-year fixed-rate mortgage is 4.90%, up 6 basis points from a week ago.
The monthly payment on a 15-year fixed-rate mortgage is undoubtedly a much higher monthly payment than that on a 30-year mortgage at the same rate. However, 15-year loans have some significant advantages: you pay thousands less in interest and pay off your loan much faster.
5/1 ARM Mortgage Rates
A 5/1 ARM has an average rate of 4.22%, down 4 basis points from a week ago.
An ARM is ideal for people looking to refinance or sell before the interest rate changes. If they don’t, their interest rates could end up being noticeably higher after an interest rate reset.
For the first five years, a 5/1 ARM typically has a lower interest rate than a 30-year fixed-rate mortgage. Keep in mind that depending on how much the interest rate on your loan adjusts, your payment has the potential to increase by a large amount.
How we calculate mortgage rates
To get an idea of where mortgage rates might be headed, we rely on information collected by Bankrate, which is owned by the same parent company as NextAdvisor. The daily rate survey focuses on home loans where the borrower has a credit score above 740, an LTV of 80% or less and lives in their own home.
The mortgage rate data below is based on Bankrate’s Mortgage Rate Survey:
Updated July 13, 2022.
Plug your desired mortgage rate and the rest of the loan details into our mortgage calculator to see what your monthly payment might look like.
Mortgage Rate Frequently Asked Questions (FAQ):
How can I get the best mortgage rate?
Looking for a home loan is one of the best ways to qualify for the lowest interest rate.
Your mortgage rate depends on a number of factors that lenders take into account when assessing the risk of giving you a mortgage. Your credit rating plays a big part in this decision. And your loan-to-value (LTV) ratio matters, so a larger down payment is better for your interest rate.
But lenders will assess your situation differently. So you can give the same paperwork to three different mortgage lenders and get offers with three different mortgage interest rates and fees that are just as different.
Should I fix my mortgage rate now?
It is impossible to know in which direction mortgage rates will move from one day to the next. This is why a mortgage interest rate freeze is such a useful tool, as it protects you when interest rates rise. And since interest rates are currently relatively low, you should secure your interest rate as soon as possible.
If you lock your interest rate, ask your lender how long the lock will last. A rate lock can last anywhere from 30 to 60 days, which usually gives you enough time to close it before the lock expires. If you want to extend the rate lock, ask about fees, as many lenders charge a rate lock extension fee.