Current national mortgage and refinance rates, June 20, 2022 – Rates rise

Mortgage interest rates rose for all loan terms compared to a week ago, according to data compiled by Bankrate. Rates for 30-year fixed, 15-year fixed, 5/1 ARMs and jumbo loans rose.

Rates last updated on June 20, 2022.

These rates are marketplace averages based on the assumptions here. Actual rates displayed across the site may vary. This story has been reviewed by Bill McGuire. All rate data accurate as of Monday, June 20th, 2022 at 7:30 a.m.

>>See historical mortgage rate movements

You can save thousands of dollars over the life of your mortgage by getting multiple offers.

“All too often, some homeowners take the path of least resistance when seeking a mortgage, in part because the process of buying a home can be stressful, complicated and time-consuming,” says Mark Hamrick, Bankrate senior economic analyst. “But when we’re talking about the potential of saving a lot of money, seeking the best deal on a mortgage has an excellent return on investment. Why leave that money on the table when all it takes is a bit more effort to shop around for the best rate, or lowest cost, on a mortgage?”

Mortgage interest rates

Today’s 30-year mortgage rate moves up, +0.21%

The average rate you’ll pay for a 30-year fixed mortgage is 5.99 percent, an increase of 21 basis points over the last seven days. A month ago, the average rate on a 30-year fixed mortgage was lower, at 5.39 percent.

At the current average rate, you’ll pay principal and interest of $591.86 for every $100k you borrow. That’s up $7.65 from what it would have been last week.

The 30-year mortgage is the most popular home loan, and it has a number of advantages. Among them:

  • Lower monthly payment. Compared to a shorter-term mortgage, such as 15 years, the 30-year mortgage offers more affordable monthly payments spread over time.
  • Stability. With a 30-year mortgage, you lock in a consistent principal and interest payment. Because of the predictability, you can plan your housing expenses for the long term. Remember: Your monthly housing payment can change if your homeowners insurance and property taxes go up or, less likely, down.
  • Buying power. Because you have lower payments, you can qualify for a bigger loan and a more expensive house.
  • Flexibility. Lower monthly payments can free up some of your monthly budget for other goals, like saving for emergencies, retirement, college tuition or home repairs and maintenance.
  • Strategic use of debt. Some argue that Americans focus too much on paying down their mortgages rather than adding to their retirement accounts. A 30-year fixed-rate mortgage with a lower monthly cost can allow you to save more for retirement.

15-year fixed mortgage rate advances,+0.27%

The average rate you’ll pay for a 15-year fixed mortgage is 5.18 percent, up 27 basis points from a week ago.

Monthly payments on a 15-year fixed mortgage at that rate will cost roughly $547 per $100k borrowed. Yes, that payment is much bigger than it would be on a 30-year mortgage, but it comes with some big advantages: You’ll save thousands of dollars over the life of the loan in total interest paid and build equity much faster.

5/1 ARM trends upward, +0.16%

The average rate on a 5/1 adjustable rate mortgage is 4.10 percent, up 16 basis points since the same time last week.

Adjustable-rate mortgages, or ARMs, are mortgage loans that come with a floating interest rate. To put it another way, the interest rate can change from time to time throughout the life of the loan, unlike fixed-rate loans. These types of loans are best for people who expect to sell or refinance before the first or second adjustment. Rates could be substantially higher when the loan first adjusts, and thereafter.

While borrowers shunned ARMs during the pandemic days of super-low rates, this type of loan has made a comeback as mortgage rates have risen.

Monthly payments on a 5/1 ARM at 4.10 percent would cost about $482 for each $100,000 borrowed over the initial five years, but could climb hundreds of dollars higher afterward, depending on the loan’s terms.

Jumbo loan interest rate goes up, +0.12%

The average jumbo mortgage rate today is 5.91 percent, an increase of 12 basis points over the last week. Last month on the 20th, the average rate for jumbo mortgages was lower, at 5.34 percent.

At today’s average jumbo rate, you’ll pay principal and interest of $591.86 for every $100k you borrow. That’s up $7.65 from what it would have been last week.

Summary: How mortgage interest rates have moved over the past week

  • 30-year fixed mortgage rate: 5.99%, up from 5.78% last week, +0.21
  • 15-year fixed mortgage rate: 5.18%, up from 4.91% last week, +0.27
  • 5/1 ARM mortgage rate: 4.10%, up from 3.94% last week, +0.16
  • Jumbo mortgage rate: 5.91%, up from 5.79% last week, +0.12

Interested in refinancing? See mortgage refinance rates

Current 30 year mortgage refinance rate trends higher, +0.19%

The average 30-year fixed-refinance rate is 5.94 percent, up 19 basis points over the last week. A month ago, the average rate on a 30-year fixed refinance was lower, at 5.31 percent.

At the current average rate, you’ll pay $591.86 per month in principal and interest for every $100,000 you borrow. That’s an increase of $15.26 over what you would have paid last week.

Mortgage rate trends: Where rates are headed

Mortgage rates plunged early in the pandemic and scraped record lows — below 3 percent — at the start of 2021. The days of sub-3 percent mortgage interest on the 30-year fixed are behind us, and rates rose past 5 percent in 2022.

“Low interest rates were the medicine for economic recovery following the financial crisis, but it was a slow recovery so rates never went up very far,” says Greg McBride, CFA, Bankrate chief financial analyst. “The rebound in the economy, and especially inflation, in the late pandemic stages has been very pronounced, and we now have a backdrop of mortgage rates rising at the fastest pace in decades.”

Comparing different mortgage terms

The 30-year fixed-rate mortgage is the most popular loan for homeowners. This mortgage has a number of advantages. Among them:

  • Lower monthly payment: Compared to a shorter term, such as 15 years, the 30-year mortgage offers lower payments spread over time.
  • Stability: With a 30-year mortgage, you lock in a consistent principal and interest payment. Because of the predictability, you can plan your housing expenses for the long term. Remember: Your monthly housing payment can change if your homeowners insurance and property taxes go up or, less likely, down.
  • Buying power: With lower payments, you can qualify for a larger loan amount and a more expensive home.
  • Flexibility: Lower monthly payments can free up some of your monthly budget for other goals, like saving for emergencies, retirement, college tuition or home repairs and maintenance.
  • Strategic use of debt: Some argue that Americans focus too much on paying down their mortgages rather than adding to their retirement accounts. A 30-year fixed mortgage with a smaller monthly payment can allow you to save more for retirement.

That said, shorter term loans have gained popularity as rates have been historically low. Although they have higher monthly payments compared to 30-year mortgages, there are some big benefits if you can afford the upfront costs. Shorter-term loans can help you achieve:

  • Greatly reduced interest costs: Because you pay off the loan faster, you’ll be able to pay less interest overall.
  • Lower interest rate: On top of less time for that interest to compound, most lenders price shorter-term mortgages with lower rates.
  • Build equity faster: The faster you pay off your mortgage, the faster you’ll own value in your home outright. That’s especially handy if you want to borrow against your property to fund other spending.
  • Debt-free sooner: A shorter-term mortgage means you’ll own your house free and clear sooner than you would with a longer-term loan.

Current mortgage rate landscape

Mortgage rates have been volatile because of the COVID-19 pandemic. Generally, though, rates have been low. For a while, some lenders were increasing rates because they were struggling to deal with the demand. In general, however, rates are consistently below 4 percent and even dipping below 3%. This is an especially good time for people with good to excellent credit to lock in a low rate for a purchase loan. However, lenders are also raising credit standards for borrowers and demanding higher down payments as they try to dampen their risks.

Learn more:

Featured lenders, June 20, 2022

Source link

Leave a Reply

Your email address will not be published. Required fields are marked *