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Mortgage rates spiked earlier this week, but they’ve since trended back down, and are now the lowest they’ve been in two weeks.
Where mortgage rates will head next depends on the path the Federal Reserve takes at its two remaining meetings this year, and how the US economy responds to the central bank’s policy decisions.
On Friday, the Bureau of Economic Analysis reported that the personal consumption expenditures price index — the Fed’s preferred measure of inflation — increased 0.3% in September and 6.2% year-over-year. Because inflation is still running hot, the Fed will likely opt for another 75-basis-point hike to the federal funds rate at its meeting next week. But it could start slowing its pace with a smaller hike in December.
Markets largely expect a big hike at the Fed’s upcoming meeting, but more 75-point hikes after that could send mortgage rates further up. On the other hand, if it raises rates too high, it could push the economy into a recession, which would likely bring mortgage rates down.
Current mortgage rates
Current refinance rates
Mortgage calculator
Use our free mortgage calculator to see how today’s mortgage rates would impact your monthly payments. By plugging in different rates and term lengths, you’ll also understand how much you’ll pay over the entire length of your mortgage.
Click “More details” for tips on how to save money on your mortgage in the long run.
30-year fixed mortgage rates
The current average 30-year fixed mortgage rate is 7.08%, according to Freddie Mac. This is the highest this rate has been since 2002.
The 30-year fixed-rate mortgage is the most common type of home loan. With this type of mortgage, you’ll pay back what you borrowed over 30 years, and your interest rate won’t change for the life of the loan.
The lengthy 30-year term allows you to spread out your payments over a long period of time, meaning you can keep your monthly payments lower and more manageable. The trade-off is that you’ll have a higher rate than you would with shorter terms or adjustable rates.
15-year fixed mortgage rates
The average 15-year fixed mortgage rate is 6.36%, an increase from the prior week, according to Freddie Mac data. The last time this rate was above 6% was in 2008.
If you want the predictability that comes with a fixed rate but are looking to spend less on interest over the life of your loan, a 15-year fixed-rate mortgage might be a good fit for you. Because these terms are shorter and have lower rates than 30-year fixed-rate mortgages, you could potentially save tens of thousands of dollars in interest. However, you’ll have a higher monthly payment than you would with a longer term.
5/1 adjustable mortgage rates
The average 5/1 adjustable mortgage rate is 5.96%, an increase from the previous week.
Adjustable rate mortgages can look very attractive to borrowers when rates are high, because the rates on these mortgages are typically lower than fixed mortgage rates. A 5/1 ARM is a 30-year mortgage. For the first five years, you’ll have a fixed rate. After that, your rate will adjust once per year. If rates are higher when your rate adjusts, you’ll have a higher monthly payment than what you started with.
If you’re considering an ARM, make sure you understand how much your rate could go up each time it adjusts and how much it could ultimately increase over the life of the loan.
Are mortgage rates going up?
Mortgage rates started ticking up from historic lows in the second half of 2021 and have increased significantly so far in 2022.
In the last 12 months, the Consumer Price Index rose by 8.2%. The Federal Reserve has been working to get inflation under control, and is expected to increase the federal funds target rate two more times this year, following increases at its last five meetings.
Though not directly tied to the federal funds rate, mortgage rates are sometimes pushed up as a result of Fed rate hikes and investor expectations of how those hikes will impact the economy.
Inflation remains elevated, but has started to slow, which is a good sign for mortgage rates and the broader economy.
How do I find personalized mortgage rates?
Some mortgage lenders let you customize your mortgage rate on their websites by entering your down payment amount, zip code, and credit score. The resulting rate isn’t set in stone, but it can give you an idea of what you’ll pay.
If you’re ready to start shopping for homes, you may apply for preapproval with a lender. The lender does a hard credit pull and looks at the details of your finances to lock in a mortgage rate.
How do I compare mortgage rates between lenders?
You can apply for prequalification with multiple lenders. A lender takes a general look at your finances and gives you an estimate of the rate you’ll pay.
If you’re farther along in the homebuying process, you have the option to apply for preapproval with several lenders, not just one company. By receiving letters from more than one lender, you can compare personalized rates.
Applying for preapproval requires a hard credit pull. Try to apply with multiple lenders within a few weeks, because lumping all of your hard credit pulls into the same chunk of time will hurt your credit score less.