Today’s Mortgage Rates for Aug. 9, 2022: Rates Go Up

Some principal mortgage rates moved up today. The average 15-year fixed and 30-year fixed mortgage rates both moved up. We also saw an upward trend in the average rate of 5/1 adjustable-rate mortgages.

Though mortgage rates have been rather consistently going up since the start of this year, what happens next depends on whether inflation continues to climb or begins to retreat.

Interest rates are dynamic and unpredictable — at least on a daily or weekly basis — and they respond to a wide variety of economic factors. Right now, they’re particularly sensitive to inflation and the prospect of a US recession. With so much uncertainty in the market, if you’re looking to buy a home, trying to time the market may not play to your favor.

If inflation rises and rates climb, this could translate to higher interest rates and steeper monthly mortgage payments. For this reason, you may have better luck locking in a lower mortgage interest rate sooner rather than later. No matter when you decide to shop for a home, it’s always a good idea to seek out multiple lenders to compare rates and fees to find the best mortgage for your specific situation.

30-year fixed-rate mortgages

The average 30-year fixed mortgage interest rate is 5.53%, which is an increase of 26 basis points compared to one week ago. (A basis point is equivalent to 0.01%.) Thirty-year fixed mortgages are the most common loan term.

A 30-year fixed rate mortgage will usually have a smaller monthly payment than a 15-year one — but typically a higher interest rate. Although you’ll pay more interest over time — you’re paying off your loan over a longer timeframe — if you’re looking for a lower monthly payment, a 30-year fixed mortgage may be a good option.

15-year fixed-rate mortgages

The average rate for a 15-year, fixed mortgage is 4.83%, which is an increase of 24 basis points from seven days ago. You’ll definitely have a bigger monthly payment with a 15-year fixed mortgage compared to a 30-year fixed mortgage, even if the interest rate and loan amount are the same.

But a 15-year loan will usually be the better deal, if you’re able to afford the monthly payments. These include usually being able to get a lower interest rate, paying off your mortgage sooner, and paying less total interest in the long run.

5/1 adjustable-rate mortgages

A 5/1 adjustable-rate mortgage has an average rate of 4.18%, an increase of 4 basis points from seven days ago. For the first five years, you’ll typically get a lower interest rate with a 5/1 ARM compared to a 30-year fixed mortgage.

But since the rate shifts with the market rate, you might end up paying more after that time, as described in the terms of your loan. Because of this, an adjustable-rate mortgage might be a good option if you plan to sell or refinance your house before the rate changes. Otherwise, shifts in the market means your interest rate might be significantly higher once the rate adjusts.

Mortgage rate trends

Though mortgage rates were historically low at the beginning of 2022, they have been increasing somewhat steadily since then.

The Federal Reserve recently raised interest rates by another 0.75 percentage points in an attempt to curb record-high inflation. The Fed has raised rates a total of four times this year, but inflation still remains high. As a general rule, when inflation is low, mortgage rates tend to be lower.

When inflation is high, rates tend to be higher. Though the Fed does not directly set mortgage rates, the central bank’s policy actions influence how much you pay to finance your home loan. If you’re looking to buy a house in 2022, keep in mind that the Fed has signaled it will continue to raise rates, and mortgage rates could increase as the year goes on.

Whether rates follow their upward projection or begin to level out hinges on if inflation actually slows. We use information collected by Bankrate, which is owned by the same parent company as CNET, to track daily mortgage rate trends. This table summarizes the average rates offered by lenders across the country:

Average mortgage interest rates

Product

Rate

Last week

Change
30-year fixed 5.53% 5.27% +0.26
15-year fixed 4.83% 4.59% +0.24
30-year jumbo mortgage rate 5.53% 5.21% +0.32
30-year mortgage refinance rate 5.49% 5.27% +0.22

Rates as of Aug.

9, 2022.

How to find personalized mortgage rates

When you are ready to apply for a loan, you can reach out to a local mortgage broker or search online. When looking into home mortgage rates, think about your goals and current finances. Things that affect what the interest rate you might get on your mortgage include: your credit score, down payment, loan-to-value ratio and your debt-to-income ratio.

Generally, you want a higher credit score, a higher down payment, a lower DTI and a lower LTV to get a lower interest rate. The interest rate isn’t the only factor that affects the cost of your home — be sure to also consider other costs such as fees, closing costs, taxes and discount points. You should comparison shop with multiple lenders — like credit unions and online lenders in addition to local and national banks — in order to get a loan that’s the best fit for you.

How does the loan term impact my mortgage?

When picking a mortgage, it’s important to consider the loan term, or payment schedule.

The mortgage terms most commonly offered are 15 years and 30 years, although you can also find 10-, 20- and 40-year mortgages. Mortgages are further divided into fixed-rate and adjustable-rate mortgages. The interest rates in a fixed-rate mortgage are stable for the duration of the loan.

For adjustable-rate mortgages, interest rates are stable for a certain number of years (most frequently five, seven or 10 years), then the rate fluctuates annually based on the current interest rate in the market. When choosing between a fixed-rate and adjustable-rate mortgage, you should think about how long you plan to stay in your house. For people who plan on staying long-term in a new house, fixed-rate mortgages may be the better option.

Fixed-rate mortgages offer more stability over time in comparison to adjustable-rate mortgages, but adjustable-rate mortgages can sometimes offer lower interest rates upfront. If you don’t have plans to keep your new house for more than three to 10 years, though, an adjustable-rate mortgage may give you a better deal. There is no best loan term as an overarching rule; it all depends on your goals and your current financial situation.

It’s important to do your research and know what’s most important to you when choosing a mortgage.

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