Mortgage rates spiked last week ahead of the Federal Reserve’s rate hike announcement. They inched back down shortly after, but they’re still higher than they’ve been in recent months.

The Fed voted last week to raise the federal funds rate by 75 basis points, or 0.75%. Mortgage rates aren’t directly influenced by the federal funds rate, but they’re often impacted by investor expectations of Fed policy decisions and how those decisions might impact the broader economy. With the Fed signaling that it’s willing to move more aggressively to fight inflation, it’s likely that rates will stay high and may continue to increase if price growth doesn’t slow.

“Any persistent/obvious signs of a wage or inflationary spiral will continue to lead to more aggressive policies,” says Robert Heck, vice president of mortgage at Morty. “In these extreme scenarios it is very possible we’ll see mortgage rates head towards 7% or higher, reflective of the inflationary environment of the 1980s.”

Mortgage rates today

Mortgage refinance rates today
Mortgage calculator

Use our free mortgage calculator to see how today’s interest rates will affect your monthly payments.

By clicking on “More details,” you’ll also see how much you’ll pay over the entire length of your mortgage, including how much goes toward the principal vs. interest.

30-year fixed mortgage rates

The current average 30-year fixed mortgage rate is 5.78%, according to Freddie Mac. This is up from the previous week’s 5.23%, and represents the largest one-week increase in 35 years.

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.

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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 4.81%, a 0.43% increase from the prior week, according to Freddie Mac data.

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 4.33%, 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 …read more

Source:: Business Insider

      

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