Today's mortgage and refinance rates: December 4, 2022 |  Rates fell last week

Today’s mortgage and refinance rates: December 4, 2022 | Rates fell last week

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The average 30-year fixed rate fell to 6.49% last week, according to Freddie Mac. This is the lowest rate for more than two months. The average 15-year fixed rate fell to 5.76%.

“Even as rates fall and house prices soften, economic uncertainty continues to limit buyer demand as we enter the final month of the year,” said Sam Khater, chief economist at Freddie Mac, in a press release.

The Federal Reserve is meeting next week to consider another hike in the federal funds rate. The Fed has raised rates to slow the economy and bring inflation under control, and there are signs that its efforts are paying off. Last month’s Consumer Price Index report showed price growth slowed more than expected in October.

But the November jobs report, released on Friday, showed the labor market remains hot. The Fed is still expected to opt for a 50 basis point lower hike next week, but warmer than expected economic data could push the central bank to raise rates higher.

Current Mortgage Rates

Type of mortgage Average rate today
This information was provided by Zillow. See more mortgage rates on Zillow

Current refinance rates

Type of mortgage Average rate today
This information was provided by Zillow. See more mortgage rates on Zillow

mortgage calculator

Use our free mortgage calculator to see the impact of today’s mortgage rates on your monthly payments. By plugging in different rates and terms, you’ll also understand how much you’ll pay over the life of your mortgage.

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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

Click “More Details” for tips on how to save money on your long-term mortgage.

30-year fixed mortgage rates

The current average 30-year fixed mortgage rate is 6.49%, according to Freddie Mac. This is a drop of almost 10 points compared to the previous week.

The 30-year fixed rate mortgage is the most common type of mortgage. 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 30-year long term allows you to spread your payments out over a long period, which means you can keep your monthly payments lower and more manageable. The tradeoff is that you’ll get a higher rate than with shorter terms or adjustable rates.

15-year fixed mortgage rates

The average 15-year fixed mortgage rate is 5.76%, down from the previous week, according to data from Freddie Mac.

If you’re looking for 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 right for you. Since 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 will have a higher monthly payment than you would with a longer term.

Should I get a HELOC? Advantages and disadvantages

If you’re looking to tap into the equity in your home, a HELOC might be the best way to do it right now, especially given the rise in home prices over the past two years. Unlike a cash-out refinance, you won’t have to get a new mortgage with a new interest rate, and you’ll likely get a better rate than with a home equity loan.

But HELOCs don’t always make sense. It is important to consider the pros and cons.

HELOC Benefits

  • Only pay interest on what you borrow
  • They usually have lower rates than alternatives, including home equity loans, personal loans and credit cards
  • If you have a lot of equity, you could potentially borrow more than you could get with a personal loan.

Against HELOC

  • Rates are variable, which means your monthly payments could increase
  • Withdrawing equity from your home can be risky if the value of the property drops or you fail to repay the loan
  • The minimum withdrawal amount may be more than you wish to borrow

When will mortgage rates go down?

Mortgage rates started to recover from historic lows in the second half of 2021 and have risen more than three percentage points since January 2022. But rates have recently fallen and they will likely continue to fall in 2023 and 2024.

However, rates are not expected to drop dramatically anytime soon. As inflation begins to decline, mortgage rates will come down somewhat as well. If we experience a recession, rates could come down a little faster. But average 30-year fixed rates will likely remain between 5% and 6% through 2023.

How do Fed rate hikes affect mortgages?

The Federal Reserve raised the federal funds rate this year in an attempt to slow economic growth and bring inflation under control. So far, inflation has slowed somewhat, but remains well above the Fed’s 2% target rate.

Mortgage rates are not directly affected by changes in the federal funds rate, but they often tend to rise or fall ahead of Fed policy changes. This is because mortgage rates change based on investor demand for mortgage-backed securities, and that demand is often influenced by how investors expect Fed hikes to affect the economy. in general.

As inflation begins to decline, mortgage rates are also expected to decline. But the Fed has signaled it is watching for continued signs of slowing inflation and won’t stop raising rates anytime soon, though it may start opting for more modest hikes in future meetings. .

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