Today’s Mortgage and Refinance Rates

Average mortgage rates rose again yesterday. And they are significantly higher than they were a week ago.

I suspect mortgage rates could rise slightly next week. Some falls had been a possibility in response to Russia’s invasion of Ukraine. But these did not materialize. And, if even such a big event can’t drive those rates down, why should we expect lesser things to?

Current mortgage and refinance rates

Program Mortgage rate APR* Change
30-year fixed conventional 4.118% 4.141% -0.04%
15-year fixed conventional 3.492% 3.528% -0.02%
20-year fixed conventional 3.992% 4.028% -0.03%
10-year fixed conventional 3.462% 3.532% Unchanged
30-year fixed FHA 4.258% 5.024% -0.06%
15-year fixed FHA 3.746% 4.37% -0.04%
30-year fixed PV 4.181% 4.389% -0.09%
15-year fixed VA 3.375% 3.706% Unchanged
5/1 ARM GO 4.75% 3.926% Unchanged
Pricing is provided by our partner network and may not reflect the market. Your rate may be different. Click here for a personalized quote. See our rate assumptions here.

Should you lock in a mortgage rate today?

I was surprised that the markets so quickly ignored Russia’s full-scale invasion of Ukraine. It is true that mortgage rates fell slightly one day this week. But, overall, investors seem to think the threat that war poses to the global economy is low. Read on to find out why they might be wrong.

Yet, for now, the outlook remains bleak for mortgage rates. Yes, we are likely to see occasional small drops. But, overall, the recent uptrend seems almost entirely intact.

So my personal rate lock recommendations remain:

  • LOCK if closing 7 days
  • LOCK if closing 15 days
  • LOCK if closing 30 days
  • LOCK if closing 45 days
  • LOCK if closing 60 days

However, with so much uncertainty right now, your instincts could easily turn out to be as good as mine, or even better. So let your instincts and personal risk tolerance guide you.

What’s Moving Current Mortgage Rates

Ukraine and the global economy

Markets don’t care about the morality of war. They focus exclusively on its impact on the global economy.

And they seem to have decided that the war in Ukraine poses no threat to that, even though Russia exports around 10 million barrels of oil every day. And they are also unfazed by the sanctions imposed by the international community.


Of course, that could change. And some still believe that the threat is considerable. Yesterday I quoted the Financial Times: “Rising energy prices alone could tip the world into a second recession in three years.”

And, also yesterday, the Wall Street Journal (paywall) echoed this concern, despite not predicting a recession:

Russia’s invasion of Ukraine threatens to restrict global energy supplies, with the resultant rise in oil and natural gas prices and risks hitting Europe hard and potentially spilling over to the United States and other global markets. It’s the last thing the global economy needs: another “supply shock” or sudden shortage of key commodities – in this case, oil, natural gas and other raw materials – that is likely aggravate a global inflation problem and make things more difficult for the federal government. Reserve and other central banks, which try to keep consumer prices from spiraling out of control.

– Wall Street Journal, “War in Ukraine means another supply shock for the global economy, the last thing it needs”, January 25, 2020

I’ve been suggesting something similar since the Ukrainian situation started to look serious. But investors don’t seem to buy into that narrative, at least for now.

What if there was a recession?

However, that could all change if events play out the way the FT predicts. A recession could well force the hand of the Fed and make it less aggressive against inflation. And that would likely lead to lower mortgage rates.

But, if the Journal is correct (quoting a source who “doesn’t see a recession coming”), mortgage rates could rise. Because higher oil prices without a recession would keep the pressure on the Fed to act decisively to counter inflation.

And this pressure is already strong. The Commerce Department’s personal income and spending report released yesterday showed consumer inflation rose 6.1% in January from a year earlier. And it was the biggest increase in 40 years. The Fed pays close attention to this particular report.

Mortgage rates coming soon

As long as the markets remain calm on the economic implications of the war in Ukraine, we will likely see a slight rise in mortgage rates. And this war could push them even higher if it fuels inflation without creating a recession.

Thus, the main hope for lower mortgage rates is a recession. And none of us want one. It’s an unfortunate fact that wishing for lower mortgage rates almost always implies wishing for a worse economy.

Economic reports next week

Again, Friday is the most important economic report coming out next week. This is the official monthly report on the employment situation. And this is another one that greatly influences the Fed.

If employment is strong, as it has been recently, then the central bank is free to focus entirely on fighting inflation. And its planned countermeasures are very likely to drive up mortgage rates.

Top Fed officials will speak in public every day next week. And expect the markets to pay even more attention to it than usual.

The potentially most important reports below are highlighted in bold. The others are unlikely to move the markets much unless they contain surprisingly good or bad data.

  • Tuesday – February Institute for Supply Management (ISM) Manufacturing Index. Plus construction spending for January
  • Wednesday – February ADP employment reportsometimes seen as an indicator of Friday’s official report
  • Thursday – February ISM services index. More weekly new unemployment insurance claims to February 26
  • Friday – February job status reportincluding non-farm payroll, unemployment rate and average hourly wage

Of course, markets might barely pay attention to most economic reports next week as they focus on Ukraine. But the report on the employment situation could be an exception if it contains unexpected information.

Mortgage interest rate forecast for next week

Unless the markets change their minds on the war in Ukraine or Friday’s jobs report turns out to be sensational, I expect mortgage rates could rise slightly next week.

Mortgage and refinance rates generally move in tandem. And the removal of unfavorable market refinancing charges last year has largely eliminated the gap that had grown between the two.

Meanwhile, another recent regulatory change has likely made mortgages for investment properties and vacation homes more accessible and less expensive.

How your mortgage interest rate is determined

Mortgage and refinance rates are typically determined by prices in a secondary market (similar to stock or bond markets) where mortgage-backed securities are traded.

And it depends heavily on the economy. Thus, mortgage rates tend to be high when things are going well and low when the economy is struggling.

Your part

But you play an important role in determining your own mortgage rate in five ways. And you can affect it significantly by:

  1. Find your best mortgage rate – They vary widely between lenders
  2. Boost your credit score – Even a small bump can make a big difference to your rate and payments
  3. Save the biggest down payment possible – Lenders like you have real skin in this game
  4. Keep your other borrowings small – The lower your other monthly commitments, the higher the mortgage you can afford
  5. Choose your mortgage carefully – Are you better off with a conventional, conforming, FHA, VA, USDA, jumbo or other loan?

Time spent getting these ducks in a row can earn you lower rates.

Remember it’s not just a mortgage rate

Be sure to factor in all of your homeownership costs when calculating how much mortgage you can afford. So focus on your “PITI”. It’s your Pprincipal (repays the amount you borrowed), IInterest (the price of the loan), (the property) Jaxes, and (owners) Iassurance. Our mortgage loan calculator can help you.

Depending on your type of mortgage and the amount of your down payment, you may also need to pay for mortgage insurance. And that can easily hit three figures every month.

But there are other potential costs. So you will have to pay homeowners association dues if you choose to live somewhere with an HOA. And, wherever you live, you should expect repair and maintenance costs. There is no owner to call when things go wrong!

Finally, you will have a hard time forgetting closing costs. You can see those reflected in the annual percentage rate (APR) that lenders will quote you. Because it spreads them effectively over the term of your loan, making it higher than your normal mortgage rate.

But you may be able to get help with those closing costs. and your down payment, especially if you are a first-time buyer. Read:

Down payment assistance programs in every state for 2021

Mortgage Rate Methodology

Mortgage reports receive daily rates based on selected criteria from multiple lending partners. We arrive at an average rate and APR for each loan type to display in our chart. Because we average a range of prices, it gives you a better idea of ​​what you might find in the market. In addition, we calculate the average of the rates for the same types of loans. For example, fixed FHA with fixed FHA. The result is a good overview of the daily rates and their development over time.

The information contained on The Mortgage Reports website is provided for informational purposes only and does not constitute advertising for products offered by Full Beaker. The views and opinions expressed herein are those of the author and do not reflect the policy or position of Full Beaker, its officers, parent company or affiliates.

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