High rates are not likely to go away any time soon. Mortgage rates have risen sharply recently, reducing affordability for homebuyers navigating an already expensive market.
“There’s no question that homebuyers are in a difficult position right now, especially those who have had their affordability affected by the change in rates in recent weeks,” says Robert Heck, vice president of mortgages at Morty.
If you’re planning to buy a home soon, Heck advises you to explore multiple mortgage options, including different types and terms, to determine what works best for you. And if you’re struggling with a new lack of affordability in this environment of rising rates, be prepared to tighten your budget.
“If rising rates have reduced your affordability, look at what you can afford now,” says Heck. “We’ve seen several buyers successfully commit over the last month, which can be frustrating at the moment, but helps advance their long-term homeownership goals.”
Current mortgage rates
Current Refinance Rates
Use our free mortgage calculator to see how current mortgage rates would affect your monthly payments. By entering different rates and terms, you’ll also understand how much you’ll pay over the entire life of your mortgage.
Your estimated monthly payment
- paying a 25% a higher down payment would save you $8,916.08 on interest charges
- Reduce the interest rate on one% I would save you $51,562.03
- Paying an additional $500 each month would reduce the length of the loan by 146 months
Click “More Details” for tips on how to save money on your mortgage over the long term.
Is it better to rent or buy 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 below the average rent, but that’s not true everywhere, especially if you’re in a high-cost urban area.
I still believe that we are in a market that is profitable to buy or own.Ralph DiBugnara, President of Home Qualified and Senior Vice President of Cardinal Financial
If you’re concerned that your rent will continue to rise, it might make sense to consider buying a home. While rents can go up year after year, if you have a fixed-rate mortgage, you know you’ll pay the same amount every month for as long as you have your mortgage.
“I still think we’re in a market that’s advantageous to buy or own,” says Ralph DiBugnara, president of Home Qualified and senior vice president of Cardinal Financial. “Higher rates mean less purchasing power in some cases, but rent is rising as fast or faster than home prices due to inflation, making buying the ideal option for many.”
How are mortgage rates determined?
In general, mortgage rates tend to be high when the US economy is booming and low when it’s struggling. Mortgage rates hit record lows during the pandemic as
loose monetary policy to boost the economy. But as the central bank works to combat inflation, rates have been rising and have passed 5%.
Your mortgage rate will be influenced by both current rate trends and factors you can control. With a good credit score, a low debt-to-income ratio, and a substantial down payment, you can get a better rate.
How do I find personalized mortgage rates?
Some mortgage lenders allow you to customize your mortgage rate on their websites by entering your
quantity, zip code 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 buying homes, you can apply for pre-approval with a lender. The lender does a hard credit check and looks at the details of your finances to set a mortgage rate.
How do I compare mortgage rates between lenders?
You can apply for prequalification with multiple lenders. A lender looks at your overall finances and gives you an estimate of the rate you’ll pay.
If you are further along in the home buying process, you have the option to apply for pre-approval with multiple lenders, not just one company. By receiving letters from more than one lender, you can compare personalized rates.
Applying for a pre-approval requires a strong credit pull. Try to apply with multiple lenders within a few weeks, as grouping all of your hard credit withdrawals into the same time frame will hurt your credit score less.