High rates probably aren’t going away anytime soon. Mortgage rates have been rising dramatically recently, cutting into affordability for homebuyers who are navigating an already-expensive market.
“There’s no question that homebuyers are in a tough position at the moment, especially those who have seen their affordability impacted by the shift in rates over the past few weeks,” says Robert Heck, vice president of mortgage at Morty.
If you’re planning to buy a home soon, Heck advises that you explore multiple mortgage options, including different types and terms, to determine what works best for you. And if you’re struggling with a newfound lack of affordability in this rising rate environment, be prepared to adjust your budget.
“If rising rates have cut into your affordability, take a look at what you can afford now,” Heck says. “We’ve seen a number of buyers compromise successfully over the past month, which can be frustrating in the moment but help advance your longer term homeownership goals.”
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Current mortgage rates
Current refinancing rates
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.
Your monthly estimated payment
- payment to 25% higher down payment would save you $8,916.08 on interest charges
- Lowering the interest rate by one% would save you $51,562.03
- Pay an additional $500 each month would reduce the loan length by 146 months
Click “More details” for tips on how to save money on your mortgage in the long run.
Is it better to rent or buy right now?
Whether you should rent or buy depends on current costs in your area and your lifestyle. In some areas of the country, it’s possible to get a mortgage with a monthly payment that’s lower than the average rent — but that’s not true everywhere, especially if you’re in a high-cost urban area.
I still believe we are in a market that is advantageous to buy or own in.Ralph DiBugnara, president of Home Qualified and senior vice president of Cardinal Financial
If you’re worried about your rent continuing to increase, it might make sense to look into buying a home. While rents can go up year after year, if you have a fixed-rate mortgage, you know you’ll be paying the same amount every month for as long as you have your mortgage.
“I still believe we are in a market that is advantageous to buy or own in,” says Ralph DiBugnara, president of Home Qualified and senior vice president of Cardinal Financial. “Higher rates mean less buying power in some cases, but rent is rising as fast or faster than home prices because of inflation, making buying the more ideal option for many.”
How are mortgage rates determined?
In general, mortgage rates tend to be high when the US economy is thriving and low when it is struggling. Mortgage rates reached all time lows during the pandemic as the
eased monetary policy to boost the economy. But as the central bank works to fight inflation, rates have been increasing and have surpassed 5%.
Your mortgage rate will be influenced both by current rate trends and factors you can control. With a good credit score, low debt-to-income ratio, and substantial down payment, you can secure a better rate.
How do I find personalized mortgage rates?
Some mortgage lenders let you customize your mortgage rate on their websites by entering your
amount, zipcode, and
. 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.
How do I compare mortgage rates between lenders?
You can apply for prequalification with multiple lenders. A lender takes a general look at your finances and gives you an estimate of the rate you’ll pay.
If you’re farther along in the homebuying process, you have the option to apply for preapproval with several lenders, not just one company. By receiving letters from more than one lender, you can compare personalized rates.
Applying for preapproval requires a hard credit pull. Try to apply with multiple lenders within a few weeks, because lumping all of your hard credit pulls into the same chunk of time will hurt your credit score less.