Mortgage of the day, refinancing rate: November 9, 2022

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Fixed rates are down today, while adjustable rates have increased slightly. Average 30-year fixed mortgage rates appear to have plateaued at 7%, at least for now. But the current economic uncertainty, particularly around inflation, makes it difficult to predict exactly where rates will go in the near future.

Last week, Federal Reserve Chairman Jerome Powell made it clear that the central bank was committed to bringing price growth back to its target rate of 2%, even if that meant plunging the economy into a recession. Powell said the tight labor market is one of the main areas the Fed is watching for signs of a slowing economy.

“Reducing inflation will likely require a prolonged period of below-trend growth and some easing of labor market conditions,” Powell said in his press conference following the Fed’s November meeting.

It is increasingly unlikely that the Fed will be able to calm inflation without triggering a mild recession. But Powell noted that it is still possible to avoid a recession and that given the current strength of the labor market, it is possible that it will ease thanks to fewer job openings, rather than to an increase in the unemployment rate.

This means for mortgage borrowers that rates will likely start to come down in the new year, either because inflation is slowing or because we have entered a recession. But if Thursday’s consumer price index data is warmer than expected, the Fed could opt for another additional hike in the fed funds rate at its December meeting, which could push rates up slightly. mortgages.

Mortgage rates today

Type of mortgage Average rate today
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mortgage rates on Zillow

Mortgage refinance rates today

Type of mortgage Average rate today
This information was provided by Zillow. See more
mortgage rates on Zillow

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Use our free mortgage calculator to see the impact of today’s mortgage rates on your monthly payments. By plugging in different rates and terms, you’ll also understand how much you’ll pay over the life of your mortgage.

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$1,161
Your estimated monthly payment

  • pay one 25% a higher down payment would save you $8,916.08 on interest charges
  • Lower the interest rate by 1% would save you $51,562.03
  • Pay an extra fee $500 each month would reduce the term of the loan by 146 month

Click “More Details” for tips on how to save money on your long-term mortgage.

30-year fixed mortgage rates

The current average 30-year fixed mortgage rate is 6.95%, according to Freddie Mac. This is a decrease from the previous week.

The 30-year fixed rate mortgage is the most common type of mortgage. 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 30-year long term allows you to spread your payments out over a long period, which means you can keep your monthly payments lower and more manageable. The tradeoff is that you’ll get a higher rate than with shorter terms or adjustable rates.

15-year fixed mortgage rates

The average 15-year fixed mortgage rate is 6.29%, down from the previous week, according to data from Freddie Mac. The last time this rate was above 6% was in 2008.

If you’re looking for the predictability that comes with a fixed rate, but are looking to spend less on interest over the life of your loan, 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 have a higher monthly payment than you would with a longer term.

5/1 Adjustable Mortgage Rates

The average 5/1 adjustable mortgage rate is 5.95%, a very slight drop from the previous week.

Adjustable Rate Mortgages can seem very attractive to borrowers when rates are high, as rates on these mortgages are generally lower than fixed mortgage rates. A ARM 5/1 is a 30 year mortgage. For the first five years, you will have a fixed rate. After that, your rate will adjust once a year. If rates are higher when your rate adjusts, you’ll have a higher monthly payment than you started with.

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

Are mortgage rates increasing?

Mortgage rates started to recover from historic lows in the second half of 2021 and have risen significantly so far in 2022.

In the past 12 months, the consumer price index increased by 8.2%. The Federal Reserve has been struggling to keep inflation in check and is expected to raise the target federal funds rate two more times this year, following increases at its previous five meetings.

Although not directly tied to the fed funds rate, mortgage rates are sometimes pushed higher due to Fed rate hikes and investors’ expectations of the impact of those hikes on the economy. .

Inflation remains high, but has started to slow, which is a good sign for mortgage rates and the economy in general.

How can I find personalized mortgage rates?

Some mortgage lenders allow you to customize your mortgage rate on their websites by entering your down payment amount, zip code and credit score. The resulting rate is not fixed, but it can give you an idea of ​​what you will pay.

If you’re ready to start shopping for homes, you can apply for pre-approval with a lender. The lender makes a firm credit application and reviews your financial details to lock in a mortgage rate.

Are HELOCs a good idea right now?

Many homeowners have gained great net worth over the past couple of years because house prices increased at an unprecedented rate. But since rates are so high today, tapping into that equity can be costly.

For owners wishing leverage the value of their home to cover a large purchase — such as a home improvement — a home equity line of credit (HELOC) may still be a good option.

A HELOC is a line of credit that lets you borrow against the equity in your home. It works similar to a credit card in that you borrow what you need rather than getting the full amount you borrow in one lump sum.

Depending on your finances and the type of HELOC you get, you may be able to get a better rate with a HELOC than with a home equity loan or one cash refinance. Just keep in mind that HELOC rates are variable, so if rates start to increase further, yours will likely increase as well.

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