For the first time since December 2019, mortgage rates have risen above 4 percent. The average rate on a 30-year mortgage is 4.01%, according to Bankrate.com. This is the highest mortgage rates have reached since the early days of the pandemic.
If you are in the market looking to buy a home or looking to refinance, now is a good time to lock in a low rate. Mortgage rates are rising and experts expect rates to continue to climb from the all-time bottom of 2.93 percent achieved in January 2021.
The average rate for the benchmark 30-year fixed-rate mortgage inched up to 4.01%. One week ago, the 30-year fixed was 3.84%. A year ago, the benchmark 30-year fixed-rate mortgage was at 2.97 percent.
Impact of rising mortgage rates on buying real estate
Mortgages rates and your lender are often a necessary part of purchasing a home, but it pays if you understand what you can actually afford.
For example, if you plan to take on a $200,000 mortgage. At 3.65% for a 30-year fixed rate mortgage, the average payment would be — excluding property taxes and private mortgage insurance — around $915 a month. That would add up to nearly $129,371 in total interest over the life of the loan. If the interest rate goes up to 5% for that 30-year fixed rate, the monthly payment would increase by nearly $1,074 monthly. That adds up to around $185,513 in total interest over the life of the loan.
Mortgage rose today, but rates still aren’t anywhere close to historically high levels or even what mortgage rates were a few years ago. Mortgage rates overall are at still historical lows. The last time borrowers saw 30-year rates routinely in the 5% range was in 2011.
Other mortgage experts say that we can see a slowdown in housing prices as mortgage rates climb might decrease purchasing power and ease some of the pressure on home prices. However, for those who can afford to buy a house, competition will remain fierce.
If you are looking to refinance, you should be able to find good deals, though at rates a bit higher than the current level. If you see a rate that fits your needs and budget, the time to do that refinance could be now.