Fixed Mortgage Rates Climb to Highest Level in More Than Four Years

Fixed mortgage rates continued to rise this week. The average 30-year fixed rate mortgage jumped from 6.71 percent to 6.83 percent, according to Bankrate.com’s weekly national survey of large lenders. The 30-year fixed rate mortgages in this week’s survey had an average of 0.33 discount and origination points.

The average 15-year fixed rate mortgage, popular for refinancing, rose to 6.45% percent. On larger loans, the average jumbo 30-year fixed rate moved upward to 7.00 percent from 6.88 percent. Adjustable rate mortgages soared higher. The average 5/1 adjustable rate mortgage scaled to 6.49 percent, and the average one-year ARM climbed to 6.00 percent.

This week’s sharp rise marked the end of a watch ‘n’ wait period when mortgage markets seemed to be passing time until next week’s Federal Reserve meeting. The benchmark 30-year rate had remained bottled up between 6.67 percent and 6.73 percent from May 3 to June 14. That ended this week, when the mortgage market concluded that the Fed not only will raise short-term rates next week, but might boost again at its next scheduled meeting, August 8.

Fixed mortgage rates are considerably higher than one year ago. This time last year, the average 30-year fixed mortgage rate was 5.66 percent, meaning that the monthly payment on a loan of $165,000 was $953.48. With the average 30-year fixed rate now 6.83 percent, the same loan originated today would carry a payment of $1078.98. Fixed mortgage rates remain an attractive refinancing alternative for adjustable rate borrowers facing sharp payment adjustments.