Mortgage, Refinance Rates Today: December 17, 2022

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According to Freddie Mac, mortgage rates have fallen again this week. The average mortgage interest with a term of 30 years is now 6.31%, more than 0.75 percentage point lower than when interest rates peaked in November. The average fixed interest rate over 15 years also fell to 5.54%.

Despite the lower rates, many potential homebuyers are still hesitant to enter the market.

“Mortgage rates continued to fall this week as softer inflation data and a modest shift in Federal Reserve monetary policy echoed in the economy,” Freddie Mac chief economist Sam Khater said in a press release. “The good news for the housing market is that recent falls in interest rates have led to a stabilization of demand for buying. The bad news is that demand remains very weak despite still quite high affordability barriers.”

For those staying in the market, now is a good time to take advantage of the low demand. Low home buying demand means buyers have more power to deal with sellers, so now is the time to ask for contingencies or negotiate a lower price.

Mortgage interest today

Mortgage type Average rate today
This information is provided by Zillow. See more mortgage rates on Zillow

Mortgage refinancing rates today

Mortgage type Average rate today
This information is provided by Zillow. See more mortgage rates on Zillow

Mortgage calculation

Use our free mortgage calculator to see how current interest rates will affect your monthly payments.

Mortgage calculation

Your estimated monthly payment

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

Clicking on ‘More Details’ will also show you how much you’ll be paying over the entire term of your mortgage, including how much goes towards principal versus interest.

30 year fixed mortgage rate

The current average 30-year fixed mortgage rate is 6.31%, according to Freddie Mac. This is a decrease from last week.

The mortgage with a fixed-interest period of 30 years is the most common form of home loan. With this type of mortgage, you pay back what you borrowed in 30 years and your interest rate does not change during the term of the loan.

Due to the long term of 30 years, you can spread your payments over a long period, so that you can keep your monthly costs lower and more manageable. The trade-off is that you get a higher rate than with shorter terms or adjustable rates.

15 year fixed mortgage rate

The average 15-year fixed mortgage rate is 5.54%, down from the previous week, according to data from Freddie Mac.

If you want the predictability that comes with a fixed rate but want to spend less on interest over the life of your loan, a 15-year fixed rate mortgage may be right for you. Because 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. You do have a higher monthly payment than with a longer term.

How will rate hikes by the Fed affect mortgages?

The Federal Reserve raised the federal funds rate this year to try to slow economic growth and control inflation. So far, inflation has slowed somewhat, but is still well above the Fed’s target of 2%.

Mortgage rates are not directly affected by changes in the Federal Funds rate, but they often go up or down before Fed policy changes. This is because mortgage rates change based on investor demand for mortgage-backed securities, and this demand is often influenced by how investors expect the Fed’s rate hikes to affect the broader economy.

As inflation begins to fall, so should mortgage rates. But the Fed has indicated it is looking for continued signs of declining inflation, and will not stop raising rates any time soon – although it may opt for smaller hikes in upcoming meetings.

When will mortgage rates go down?

Mortgage rates have risen dramatically so far in 2022, but there are signs that they have finally peaked.

In October, the consumer price index increased by 7.1% year-on-year, a significant slowdown compared to the previous month. This is good news for mortgage borrowers and the wider economy.

As inflation falls, mortgage rates are likely to fall as well. But the Fed is looking for continued signs of declining inflation, meaning it’s not likely to stop raising interest rates anytime soon, though officials have said they expect to slow the pace of rate hikes. This should ease upward pressure on mortgage rates.

Are HELOCs a good idea right now?

Many homeowners have gained a lot of equity in recent years as house prices have risen at an unprecedented rate. But because rates are so high now, tapping into that equity can be expensive.

For homeowners looking to use their home’s value to cover a major purchase, such as a home renovation, a home equity line of credit (HELOC) can still be a good option.

A HELOC is a line of credit that allows you to borrow against the equity of your home. It works similarly to a credit card in that you borrow what you need instead of getting the entire amount you borrow in one go.

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 payout refinance. Keep in mind that HELOC rates are variable, so if rates continue to rise, yours will likely rise as well.