Mortgage Rates: Compare Today&039s Rates | Bankrate

Today's national mortgage rate trends. On Thursday, September 01, 2022, the current average 30-year fixed-mortgage rate is 5.98%, rising 11 basis points 

Mortgage industry insights

Will mortgage rates follow the Fed?

Mortgage rates have been on an upward track so far this year, but that path might change as the Federal Reserve continues to battle inflation, increasing the federal funds rate again in July.

“The Fed has raised interest rates as much in little more than four months as what took three years the last time they moved rates up,” says Greg McBride, chief financial analyst for Bankrate. “The cumulative effect of this sharp rise in rates has cooled the housing market and caused the economy to start slowing, but hasn’t done much to lower inflation.”

Fed policy doesn’t directly influence rates on fixed mortgages — they follow the 10-year Treasury yield. However, the central bank’s moves have driven those yields down. As a result, fixed mortgage rates have pulled back from the near-6 percent range we saw in June.

Though the Fed doesn’t set fixed mortgage rates, its actions do affect adjustable-rate mortgages (ARMs) and home equity products. Each time the central bank raises its key rate, variable home loan rates move in-step.

The swift uptrend in mortgage rates has been weighing on home sales during what would historically be an active spring and summer homebuying season. As of June, sales have come in lower five months in a row, the National Association of Realtors reports.

Read more: First-time home buyer? California gives 0% down payment loan – Los Angeles Times

The housing market is showing further signs of cooling as appreciation slows, though prices are still posting double-digit gains for now, according to CoreLogic’s price index. There’s been some movement on the inventory front, and builders are busy breaking ground on more homes. At this point, it’s unclear what effect a recession might have given the job market remains relatively healthy.

Still, for buyers, a slowdown would bring much-needed relief after the pandemic home-shopping frenzy.

Whatever type of mortgage you’re looking for, in this environment, it’s more important than ever to compare rates before selecting a lender.

“Conducting an online search can save thousands of dollars by finding lenders offering a lower rate and more competitive fees,” says McBride.

Read more: This week’s latest mortgage news

  • How does the Federal Reserve affect mortgage rates?

How to get a mortgage

Because a home is usually the biggest purchase a person makes, a mortgage is usually a household’s largest chunk of debt. Getting the best possible terms on your loan can mean a difference of hundreds of extra dollars in or out of your budget each month, and tens of thousands of dollars in or out of your pocket over the life of the loan. It’s important to prepare for the mortgage application process to ensure you get the best rate and monthly payments within your budget.

Read more: Here are the 5 most overvalued housing markets in the US — they could even see prices plunge 15% to 20% if a bad recession hits

Here are quick steps to prepare for a mortgage:

  1. Build your credit
  2. Make a budget
  3. Set savings aside for both down payment and expected monthly payments
  4. Research the best type of mortgage for you
  5. Compare current mortgage rates
  6. Choose the right lender
  7. Get preapproved
  8. See multiple houses within your budget
  9. Apply and get approved for a mortgage
  10. Close on your new house

>> Read more: How to get a mortgage guide

  • Different types of mortgages
  • How much mortgage can I afford?
  • What is the difference between mortgage prequalification and preapproval?

Why compare mortgage rates?

Shopping around for quotes from multiple lenders is one of Bankrate’s most crucial pieces of advice for every mortgage applicant. When you shop, it’s important to think about not just the interest rate you’re being quoted, but also all the other terms of the loan. Be sure to compare APRs, which include many additional costs of the mortgage not shown in the interest rate. Keep in mind that some institutions may have lower closing costs than others, or your current bank may extend you a special offer. There’s always some variability between lenders on both rates and terms, so make sure you understand the full picture of each offer, and think about what will suit your situation best. Comparison-shopping on Bankrate is especially smart, because our relationships with lenders can help you get special low rates.

  • How do I find and compare current mortgage rates?
  • How do I choose a mortgage lender?

What factors determine my mortgage rate?

Lenders consider these factors when pricing your interest rate:

  • Credit score
  • Down payment
  • Property location
  • Loan amount/closing costs
  • Loan type
  • Loan term
  • Interest rate type

Your credit score is the most important driver of your mortgage rate. Lenders have settled on this three-digit score as the most reliable predictor of whether you’ll make prompt payments. The higher your score, the less risk you pose in the lender’s view — and the lower rate you’ll pay.

Read more: House Hacking: How Financially Savvy People Live in Expensive Markets While Saving Money

Lenders also consider how much you’re putting down. The greater share of the home’s total value you pay upfront, the more favorably they view your application. The kind of mortgage you choose can affect your rate, too, with shorter-term loans like 15-year mortgages typically having lower rates compared to 30-year ones.

  • What is the minimum credit score to get a mortgage?
  • What is the difference between APR and interest rate?

FAQs about mortgage interest rates

  • What is a mortgage?
  • What is a mortgage rate lock?
  • Pros and cons of getting a mortgage vs. renting
  • What are mortgage points?

Looking to refinance?

Refinancing your mortgage can be a good financial move if you lock in a lower rate. However, there are upfront costs associated with refinancing, such as appraisals, underwriting fees and taxes, so you’ll want to be sure the savings outpace the refinance price tag in a reasonable amount of time — most experts say the ideal breakeven timeline is 18 to 24 months.

As mortgage rates rise, fewer homeowners will stand to benefit from refinancing, but even at their current level, millions of borrowers could still save.

Reducing your rate isn’t the only reason to refinance. It’s also possible to tap your home equity to pay for home renovation, or, if you want to pay down your mortgage more quickly, you can shorten your term to 20, 15 or even 10 years. Because home values have risen sharply in the last few years, it’s also possible that a refinance could free you from paying for private mortgage insurance.

>> Compare refinance rates

>> Read more: Information on mortgage refinancing

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