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Here are today’s mortgage rates, June 16, 2022 | Courses are trending up

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Major mortgage rates are all marching higher today. The unusual inflation in the cost of borrowing for 30-year fixed-rate mortgages is notable, but 15-year fixed-rate rates have also slowly increased. At the same time, average rates for 5/1 adjustable rate mortgages (ARM) also increased.

The averages for 30-year fixed, 15-year fixed, and 5/1 ARMs are:

Mortgage Rate Forecast: Why Are Mortgage Rates Changing?

The pandemic initially drove interest rates lower as it led to a slowdown in economic activity. Disruptions in the global supply chain as a result of the pandemic caused bottlenecks that increased inflation and interest rates.

We may soon find ourselves in the opposite situation, where factors contributing to inflation could slow economic growth. Slumping economies tend to be accompanied by lower mortgage rates.

However, this forecast is far from certain and at the moment it looks like rates could change from week to week, but no drop is expected. The impact of the Russian invasion of Ukraine and the Chinese COVID lockdown on supply chains will likely result in higher inflation.

As long as inflation persists, the chances of returning to the glory days of low mortgage rates remain slim. “Until inflation is controlled, there is a risk that interest rates will rise,” Danielle Hale, chief economist at Realtor.com, told NextAdvisor.

What do today’s mortgage rates mean for your home buying plans?

Homebuyers, who see their purchasing power dwindling, are feeling the effects of high prices and rising interest rates.

Buying a home at this point is not the wrong move, but panicking at this point is a mistake. Don’t rush into a home purchase worrying that rates or prices will go up forever. If the time to buy is right for you, then instead take the time to find the right home for you at an affordable price.

Owning a home is a better choice if you are planning to stay for a long period of time. You can weather the inevitable fluctuations in the market by keeping the house for a longer period of time. Be sure to stick to your home buying budget and only buy a house that you can afford. According to experts, you shouldn’t spend more than 28% of your pre-tax income on housing.

Why is it important to look at the history of 30-year fixed-rate mortgages?

Compared to 2020 and 2021, today’s rates are higher, but looking ahead, they’re not outside of normal ranges. This means that your mortgage interest rates don’t have to ruin your plans to become a homeowner.

Data collected by government-sponsored entity Freddie Mac is shown in the chart above. Typically, NextAdvisor references mortgage rate data compiled by Bankrate. Prices on this chart differ slightly from data elsewhere on this page, historical trends generally follow each other. A look back at Freddie Mac’s historical prices provides a good overview of how today’s prices compare to the past two decades.

Watch out for rental fees

The industry term for the upfront payments you pay when you get a home loan are closing costs. The fees for your appraisal, title insurance, and any lender fees are part of your closing costs. These fees vary depending on the amount of your loan, but are typically 3% to 6% of your loan balance. It’s important to be mindful of the closing costs you’re paying because the higher your closing costs, the higher your Annual Percentage Rate (APR) will be.

Today’s mortgage refinancing rates

Refinancing rates made headlines today. We saw an astounding rise in interest rates on 30-year term loans. Interestingly, 15-year fixed rate refinance moved in the opposite direction and fell. If you’ve been considering a 10-year refinance loan, all you know is that average interest rates have also gone up.

The refinance averages for 30-year, 15-year, and 10-year loans are:

Find out about mortgage rates that suit your individual needs.

Interest rates for 30-year fixed-rate mortgages

For a 30-year fixed-rate mortgage, the average interest rate is 5.91%, up 37 basis points from seven days ago.

15-year mortgage rates

The median interest rate on a 15-year fixed-rate mortgage is 5.11%, up 36 basis points from the same time last week.

The monthly payment on a 15-year fixed-rate mortgage is higher than what you would pay on a 30-year mortgage. However, 15-year loans have some significant advantages: you pay thousands less in interest and pay off your loan much faster.

5/1 ARM interest rates

A 5/1 ARM is trading at an average price of 4.02%, up 11 basis points from the same time last week.

An adjustable rate mortgage is ideal for households looking to sell or refinance before the interest rate changes. If they don’t, their interest rates could end up being noticeably higher after an interest rate reset.

For the first five years, a 5/1 ARM typically has a lower interest rate than a 30-year fixed-rate mortgage. Keep in mind that depending on the terms of your loan, your payment could be hundreds of dollars higher after an interest rate adjustment.

How we calculate mortgage rates

We use Bankrate’s daily rate data for our mortgage rate trends. These overnight rates are based on a specific personal financial profile that includes only single-family home loans with a loan-to-value ratio of 80% or better. Bankrate is part of the same parent company as NextAdvisor.

The following table compares today’s average rates to those a week ago, based on information provided to Bankrate by lenders across the country:

Prices valid from June 16, 2022.

pro tip

Use NextAdvisor’s Mortgage Calculator to see how your monthly mortgage payment will change based on things like your interest rate, homeowners insurance, and property taxes.

Mortgage Rate Frequently Asked Questions (FAQ):

How do I qualify for the lowest mortgage rate?

Looking for a home loan is a great way to get the lowest mortgage rate.

Your mortgage rate depends on a number of factors that lenders take into account when assessing the risk of giving you a mortgage. Your credit score factors into the decision. And your loan to value (LTV) is also important, so a larger down payment is better for your interest rate.

But banks will look at your circumstances differently. So you can give the same paperwork to three different mortgage lenders and receive mortgage offers with vastly different rates and fees.

When should I freeze my mortgage rate?

It is impossible to know in which direction mortgage rates will move from one day to the next. This is why a mortgage interest rate freeze is such a useful tool, as it protects you when interest rates rise. And since interest rates are currently relatively low, you should secure your interest rate as soon as possible.

If you lock your interest rate, ask your lender how long the lock will last. A rate lock can last anywhere from 30 to 60 days, which usually gives you enough time to close it before the lock expires. If something happens that requires you to extend your rate lock, ask about fees, as many lenders charge a rate lock extension fee.

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