Mortgage and Refinancing Rates Today: June 20, 2022

Mortgage rates rose last week before

Federal Reserve

Announcement of an interest rate hike. They slowly regressed after a while, but are still higher than they have been in recent months.

The Federal Reserve voted last week to raise the federal funds rate by 75 basis points, or 0.75%. Mortgage rates are not directly affected by the federal funds rate, but are often influenced by investors’ expectations of the Fed’s policy decisions and how those decisions might affect the broader economy. With the Fed signaling its willingness to move more aggressively to fight inflation, rates are likely to remain high and may continue to increase if price growth does not slow.

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

Today’s Mortgage Rates

Today’s Mortgage Refinance Rates

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 will also see the amount that you will pay over the entire term of the mortgage, including the amount that is paid in principal for interest.

Fixed mortgage rates for 30 years

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

A 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 extended term of 30 years allows you to spread your payments over an extended period of time, which means you can keep your monthly payments low and more manageable. The trade-off is that you will have a higher rate than you would with shorter periods or adjustable rates.

Fixed Mortgage Rates for 15 Years

The average 15-year fixed-rate mortgage rate is 4.81%, up 0.43% from the previous 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, then a 15-year fixed rate mortgage might be right for you. Since 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 get a higher monthly payment than you get in the long run.

1/5 adjustable mortgage rates

The average 5/1 adjustable mortgage rate is 4.33%, up from the previous week.

Adjustable rates of mortgages can seem very attractive to borrowers when the rates are high, because the rates on these mortgages are usually lower than fixed mortgage rates. 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 the rates are higher when you adjust your rates, you will get a higher monthly payment than you started with.

If you’re considering ARM, make sure you understand how much your rate will rise each time it adjusts and how much will eventually increase over the life of the loan.

Will Mortgage Rates Go Up in 2022?

To help the US economy during the COVID-19 pandemic, the Federal Reserve aggressively purchased assets, including mortgage-backed securities. This has helped keep mortgage rates at historic lows.

However, the Fed is now planning to cut the assets it holds, and is expected to raise the federal funds rate four more times in 2022, after increases in March, May and June.

Average mortgage rates have risen recently, and Fed announcements suggest mortgage rates may continue to rise in 2022. You may want to lock in a rate now rather than risk a higher rate later, but don’t rush into buying a home if you’re not ready. .

What is a fixed rate mortgage versus an adjustable rate mortgage?

Historically, adjustable mortgage rates tended to be lower than 30-year fixed rates. When mortgage rates go up, ARM can start to look like a better deal – but it depends on your situation.

Fixed rate mortgages keep your rate for the life of your loan. Adjustable rate mortgages maintain your rate for the first few years, and then the rate goes up or down periodically.

Since adjustable rates start low, they are worthwhile options if you plan to sell your home before the interest rate change. For example, if you acquire a 1/7 ARM and want to move before the seven-year fixed-price period ends, you don’t risk paying a higher price later.

But if you want to buy a forever home, a flat rate might be a better fit, because you likely won’t be increasing your price in a few years.