Mortgage of the day, refinancing rate: May 11, 2022


Mortgage rates have hovered above 5% for several weeks now. Given that inflation remains a problem and that


Federal Reserve

is trying to rein in rapid price growth, rates are likely to remain high.

Since rates are already high and could continue to rise, homebuyers will need to find affordability where they can by searching for the lowest rate available and, once they find it, fixing.

“Locking in a rate is generally not binding, and you can always re-evaluate your options as things progress,” says Robert Heck, vice president of mortgages at Morty.

Today’s Mortgage Rates

Today’s Refinance Rates

mortgage calculator

Use our free mortgage calculator to see how today’s interest rates will affect your monthly payments:

mortgage calculator

$1,161
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 clicking on “More details”, you will also see the amount you will pay over the life of your mortgage, including the amount of principal versus interest.

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.

In March, the consumer price index reached an annual rate of 8.5%, the fastest rate of inflation since 1981. The Federal Reserve is trying to control inflation and plans to increase the target federal funds rate five more times this year, following a 0.25% increase at its March meeting and a 0.5% increase in May.

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.

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, says Ralph DiBugnara, president of Qualified at home and Senior Vice President of Cardinal Financial.

“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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