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Mortgage rates have stayed relatively flat after plunging over a week ago. Rates may stay near their current levels for the remainder of 2022 before starting to fall in the new year.

Fannie Mae’s Economic and Strategic Research Group predicts that 30-year fixed rates will average 6.8% in 2023 and 6.1% in 2024, according to its latest monthly forecast. The group also expects that the economy will experience a “modest” recession in the first quarter of next year. This would help put downward pressure on mortgage rates.

“Higher interest rates have ignited the typical reduction in residential fixed investment, which historically has led into either an economic slowdown or recession,” Doug Duncan, senior vice president and chief economist at Fannie Mae, said in a press release. “From our perspective, the good news is that demographics remain favorable for housing, so the sector appears well-positioned to help lead the economy out of what we expect will be a brief recession.”

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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.

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30-year fixed mortgage rates

The current average 30-year fixed mortgage rate is 6.61%, according to Freddie Mac. This is a 47-basis-point decrease from 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 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 5.98%, a 40-basis-point drop 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.

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Source:: Business Insider

      

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