Current national mortgage and refinance rates, August 31, 2022

Mortgage rates rose for all types of loans 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 moved higher.

Mortgage rates have been on a wild ride as of late, with the 30-year fixed briefly reaching 6 percent as the Federal Reserve cracks down on inflation. The rate chart could continue to look choppy — the Fed’s rate-raising stance against inflation also could lead to a recession, and that could cause mortgage rates to retreat.

The central bank raised rates again at its July 27 meeting. The one-two punch of consecutive rate increases of three-quarters of a point are likely to cool the economy. “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,” says Greg McBride, CFA, Bankrate chief financial analyst.

Rates accurate as of August 31, 2022.

These rates are Bankrate’s overnight average rates and are based on the assumptions indicated here. Actual rates available on-site may vary. This story has been reviewed by Bill McGuire. All rate data accurate as of Wednesday, August 31st, 2022 at 7:30 a.m.

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

30-year mortgage goes up, +0.11%

The average rate for the benchmark 30-year fixed mortgage is 5.98 percent, up 11 basis points over the last week. A month ago, the average rate on a 30-year fixed mortgage was lower, at 5.47 percent.

At the current average rate, you’ll pay principal and interest of $591.86 for every $100k you borrow. That’s an increase of $7.65 over what you would have paid last week.

Use our mortgage calculator to approximate your monthly payments and see how much you’ll save by adding extra payments. Our tool will also help you calculate how much interest you’ll fork up over the life of your loan.

15-year mortgage rate trends higher,+0.12%

The average rate for the benchmark 15-year fixed mortgage is 5.20 percent, up 12 basis points over the last seven days.

Monthly payments on a 15-year fixed mortgage at that rate will cost approximately $547 per $100k borrowed. The bigger payment may be a little harder to find room for in your monthly budget than a 30-year mortgage payment would, but it comes with some big advantages: You’ll come out several thousand dollars ahead over the life of the loan in total interest paid and build equity much more rapidly.

5/1 adjustable rate mortgage climbs, +0.09%

The average rate on a 5/1 ARM is 4.42 percent, climbing 9 basis points over the last 7 days.

Adjustable-rate mortgages, or ARMs, are mortgage terms that come with a floating interest rate. In other words, the interest rate can change intermittently throughout the life of the loan, unlike fixed-rate loans. These types of loans are best for people who expect to refinance or sell before the first or second adjustment. Rates could be materially 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 4.42 percent would cost about $496 for each $100,000 borrowed over the initial five years, but could increase by hundreds of dollars afterward, depending on the loan’s terms.

Current jumbo mortgage rate goes up, +0.10%

Today’s average rate for jumbo mortgages is 5.97 percent, up 10 basis points over the last seven days. This time a month ago, the average rate was lower, at 5.45 percent.

At today’s average rate, you’ll pay $591.86 per month in principal and interest for every $100k you borrow. That’s an extra $7.65 compared with last week.

Recap: How mortgage rates have moved over the past week

  • 30-year fixed mortgage rate: 5.98%, up from 5.87% last week, +0.11
  • 15-year fixed mortgage rate: 5.20%, up from 5.08% last week, +0.12
  • 5/1 ARM mortgage rate: 4.42%, up from 4.33% last week, +0.09
  • Jumbo mortgage rate: 5.97%, up from 5.87% last week, +0.10

Interested in refinancing? See rates for home refinance

30-year fixed-rate refinance moves up, +0.13%

The average 30-year fixed-refinance rate is 5.95 percent, up 13 basis points from a week ago. A month ago, the average rate on a 30-year fixed refinance was lower, at 5.45 percent.

At the current average rate, you’ll pay $591.86 per month in principal and interest for every $100,000 you borrow. Compared with last week, that’s $7.65 higher.

Rate trends: Where are mortgage rates 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.

Where to find the best rates

Mortgage rates can vary largely based on overarching market forces, the loan amount, your location, your financial situation and how eager mortgage lenders are to get your business. Keep in mind that the rates we quote are averages — some people will be quoted higher or lower or that exact rate, and the rate may change daily even at the same lender.

It’s crucial when you’re looking for a loan to shop around and compare all the terms of your offers, not just the interest rate you’re being quoted. Your best rate and terms may be from an online lender, the bank down the street or perhaps through a mortgage broker. You won’t know unless you shop multiple lenders through multiple channels.

Bankrate is a great place to start, because you can take advantage of our mortgage rate comparison tool and remain up to date on current rates. If you’re not happy with the results you see between these pages, you should check with the institution where you do your banking, and other small lenders like credit unions or local banks.

Keep reading:

Featured lenders for August 31, 2022

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