Today's mortgage and refinance rates: November 3, 2022 | Fed rate increases, but mortgage rates hold steady
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Average 30-year fixed mortgage rates continue to hold just below 7%. Fixed rates are relatively flat today, while adjustable rates have been somewhat volatile this week.
On Wednesday, the Federal Reserve announced it would hike the federal funds rate by another 75 basis points, its fourth consecutive hike of this size. While many expect the Fed to start to slow its pace with a smaller, 50-basis-point increase in December, Fed Chair Jerome Powell reiterated in his press conference following the announcement that the central bank is committed to tackling inflation and that it's "very premature" to discuss a pause in rate increases.
In its press release, the Federal Open Market Committee, the group that sets Fed policy, noted it "anticipates that ongoing increases in the target range will be appropriate in order to attain a stance of monetary policy that is sufficiently restrictive to return inflation to 2 percent over time."
As long as inflation remains high and the Fed continues raising rates, mortgage rates are likely to remain elevated, as well. But if price growth starts to meaningfully come down or we enter a recession, rates will likely fall. In its most recent housing forecast, Fannie Mae predicted that 30-year fixed rates would drop to 6.2% by the end of 2023.
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Use our free mortgage calculator to see how today's mortgage rates would impact your monthly payments. By plugging in different rates and term lengths, you'll also understand how much you'll pay over the entire length of your mortgage.
Click "More details" for tips on how to save money on your mortgage in the long run.
30-year fixed mortgage rates
The current average 30-year fixed mortgage rate is 7.08%, according to Freddie Mac. This is the highest this rate has been since 2002.
The 30-year fixed-rate mortgage is the most common type of home loan. 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 lengthy 30-year term allows you to spread out your payments over a long period of time, meaning you can keep your monthly payments lower and more manageable. The trade-off is that you'll have a higher rate than you would with shorter terms or adjustable rates.
15-year fixed mortgage rates
The average 15-year fixed mortgage rate is 6.36%, an increase from the prior week, according to Freddie Mac data. The last time this rate was above 6% was in 2008.
If you want 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 a good fit 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. However, you'll 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 5.96%, an increase from the previous week.
Adjustable rate mortgages can look very attractive to borrowers when rates are high, because the rates on these mortgages are typically lower than fixed mortgage rates. A 5/1 ARM is a 30-year mortgage. For the first five years, you'll have a fixed rate. After that, your rate will adjust once per year. If rates are higher when your rate adjusts, you'll have a higher monthly payment than what you started with.
If you're considering an ARM, make sure you understand how much your rate could go up each time it adjusts and how much it could ultimately increase over the life of the loan.
Are mortgage rates going up?
Mortgage rates started ticking up from historic lows in the second half of 2021 and have increased significantly so far in 2022.
In the last 12 months, the Consumer Price Index rose by 8.2%. The Federal Reserve has been working to get inflation under control, and is expected to increase the federal funds target rate two more times this year, following increases at its previous five meetings.
Though not directly tied to the federal funds rate, mortgage rates are sometimes pushed up as a result of Fed rate hikes and investor expectations of how those hikes will impact the economy.
Inflation remains elevated, but has started to slow, which is a good sign for mortgage rates and the broader economy.
How do I find personalized mortgage rates?
Some mortgage lenders let you customize your mortgage rate on their websites by entering your down payment amount, zip code, and credit score. The resulting rate isn't set in stone, but it can give you an idea of what you'll pay.
If you're ready to start shopping for homes, you may apply for preapproval with a lender. The lender does a hard credit pull and looks at the details of your finances to lock in a mortgage rate.
Are HELOCs a good idea right now?
Many homeowners gained a lot of equity over that past couple of years as home prices increased at an unprecedented rate. But because rates are so high now, tapping into that equity can be expensive.
For homeowners looking to leverage their home's value to cover a big purchase — such as a home renovation — 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 similarly to a credit card in that you borrow what you need rather than getting the full amount you're borrowing in a 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 you would with a home equity loan or a cash-out refinance. Just keep in mind that HELOC rates are variable, so if rates start to trend up further, yours will likely increase, as well.