Mortgage of the day, refinancing rate: April 30, 2022

Rates have held steady this week, hovering just above 5%, according to Freddie Mac. It was the first time since early March that the average weekly rate did not rise. However, that doesn’t necessarily mean they’re done getting up.

“I think rates above 5% will become the norm, and I don’t see any significant downward movement in the near future,” said Ralph DiBugnara, president of Home Qualified and senior vice president of Cardinal Financial.

Even if rates are up, that doesn’t necessarily mean it’s not a good time to buy a home. Depending on where you live, buying a home may be more beneficial than renting.

“I still believe we’re in a market where it’s beneficial to buy or own,” DiBugnara says. “Higher rates mean less buying power in some cases, but rents are rising as fast or faster than house prices due to inflation, making buying the most ideal option. for many.”

Mortgage rates today

Mortgage refinance rates today

mortgage calculator

Use our free mortgage calculator to see how today’s mortgage rates will affect your monthly and long-term payments.

mortgage calculator

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

By plugging in different terms and interest rates, you’ll see how your monthly payment might change.

Are mortgage rates increasing?

Mortgage rates started to recover from historic lows in the second half of 2021 and will likely continue to rise throughout 2022.

Over the past 12 months, the consumer price index has risen 8.5%, the fastest rate of inflation since 1981.

Federal Reserve

has worked to keep inflation under control and plans to raise the federal funds target rate six more times this year, following a 0.25% increase at its March meeting.

Although not directly tied to the federal funds rate, mortgage rates are often pushed higher by Fed rate hikes. As the central bank continues to tighten monetary policy to reduce inflation, mortgage rates are likely to remain high.

What do high rates mean for the housing market?

When mortgage rates rise, homebuyers’ purchasing power declines, as more of their projected housing budget must be spent on interest payments. If rates get high enough, buyers can be shut out of the market altogether, cooling demand and putting downward pressure on home price growth.

There is such a shortage that even if 50% of people stop looking today, you would still be in high demand. Ralph DiBugnara, President of Home Qualified and Senior Vice President of Cardinal Financial

However, that doesn’t mean house prices will go down – in fact, they’re expected to rise even more this year, just at a slower pace than what we’ve seen over the past two years.

Even if high rates slow demand, low inventories will continue to drive up prices, DiBugnara says.

“There’s such a shortage that even if 50% of people stop looking today, you’d still have high demand,” he says. “So I just think because of that demand, you’re going to see prices go up for at least 18 to 24 months.”

What is a good mortgage rate?

It can be difficult to know if a lender is offering you a good rate, which is why it’s so important to get pre-approved with several

mortgage lenders

and compare each offer. Apply for pre-approval from at least two or three lenders.

Your price isn’t the only thing that matters. Be sure to compare both your monthly costs and your upfront costs, including lender fees.

Although mortgage rates are heavily influenced by economic factors beyond your control, there are steps you can take to ensure you get a good rate:

  • Consider fixed rates versus adjustable rates. You may be able to get a lower introductory rate with an adjustable rate mortgage, which can be beneficial if you plan to move before the end of the introductory period. But a fixed rate might be better if you’re buying a house forever, because you don’t risk your rate going up later. Examine the rates offered by your lender and weigh your options.
  • Look at your finances. The stronger your financial situation, the lower your mortgage rate should be. Look for ways to increase your credit score or reduce your debt ratio, if necessary. Saving for a larger down payment also helps.
  • Choose the right lender. Each lender charges different mortgage rates. Choosing the right one for your financial situation will help you get a good rate.

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