Mortgage rates have risen again this month. They started to rise sharply in early 2022, but cooled off a bit in early May. Now, with news that inflation rose again in May and recent rate hikes by the Federal Reserve, mortgages are likely to remain more expensive for borrowers.
“With the Fed announcing a 75 basis point hike, the largest since 1994, we should expect a continuation
in the coming days and weeks as the market continues to price and try to settle into these rate levels,” says Robert Heck, vice president of mortgages at Morty.
Rising rates have hurt affordability for homebuyers, prompting many to reevaluate their budgets or leave the market altogether. At this time last year, the average 30-year mortgage rate was at 3.02%. On a $250,000 loan, that works out to a monthly payment of $1,057. At the current average rate of 5.81%, that same monthly payment jumps to $1,468.
Current mortgage rates
Current Refinance Rates
Use our free mortgage calculator to see how current mortgage rates would affect your monthly payments. By entering different rates and terms, you’ll also understand how much you’ll pay over the entire life of your mortgage.
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 1% I would save you $51,562.03
- Paying an additional $500 each month would reduce the length of the loan by 146 months
Click “More Details” for tips on saving money on your mortgage over the long term.
30-year fixed mortgage rates
The current average 30-year fixed mortgage rate is 5.81%, according to Freddie Mac. This is up from 5.78% the previous week.
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 over the life of the loan.
The long term of 30 years allows you to spread your payments over a long period of time, which means you can keep your monthly payments lower and more manageable. The trade-off is that you will 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 4.92%, an increase of 0.12% from the previous week, according to data from Freddie Mac.
If you want the predictability that comes with a fixed rate but want to spend less on interest over the life of your loan, a 15-year fixed-rate mortgage might be a good option 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 will have a higher monthly payment than with a longer term.
Adjustable Mortgage Rates 5/1
The 5/1 average adjustable mortgage rate is 4.41%, an increase from the previous week.
Adjustable rate mortgages can seem very attractive to borrowers when rates are high, because the rates on these mortgages are often lower than fixed mortgage rates. A 5/1 ARM is a 30-year mortgage. For the first five years, you will have a fixed rate. After that, your rate will be adjusted once a year. If rates are higher when your rate adjusts, you’ll have a higher monthly payment than you started with.
If you’re considering an ARM, make sure you understand how much your rate could increase each time it adjusts and how much it could ultimately increase over the life of the loan.
Are mortgage rates going up?
Mortgage rates began to rise from record lows in the second half of 2021 and may continue to rise throughout 2022. This is largely due to high levels of inflation and the political response to rising prices.
In the last 12 months, the Consumer Price Index increased by 8.6%. the
has been working to rein in inflation and plans to raise the target federal funds rate four more times this year, following hikes in March, May and June.
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.
How do I find personalized mortgage rates?
Some mortgage lenders allow you to customize your mortgage rate on their websites by entering your
quantity, zip code and
. 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 buying homes, you can apply for pre-approval with a lender. The lender does a hard credit check and looks at the details of your finances to secure a mortgage rate.
How do I compare mortgage rates between lenders?
You can apply for prequalification with multiple lenders. A lender looks at your overall finances and gives you an estimate of the rate you’ll pay.
If you are further along in the home buying process, you have the option to apply for pre-approval with multiple lenders, not just one company. By receiving letters from more than one lender, you can compare personalized rates.
Applying for a pre-approval requires a strong credit pull. Try to apply with multiple lenders within a few weeks, as grouping all of your hard credit claims into the same time period will hurt your credit score less.