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Mortgage rates today: Monday, December 5, 2022
On Monday, Dec. 5, 2022, the average interest rate on a 30-year fixed-rate mortgage rose 20 basis points to 6.33% APR. The average rate on a 15-year fixed-rate mortgage went up 25 basis points to 5.718% APR, and the average rate on a 5-year adjustable-rate mortgage went down seven basis points to 6.339% APR, according to rates provided to NerdWallet by Zillow. The 30-year fixed-rate mortgage is 19 basis points lower than one week ago and 337 basis points higher than one year ago. A basis point is one one-hundredth of one percent. Rates are expressed as an annual percentage rate, or APR.
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Mortgage rates this week
Fixed mortgage rates dropped while the 5-year adjustable rate rose in the week ending Dec. 1.
The 30-year fixed-rate mortgage averaged 6.52% APR, down nine basis points from the previous week's average.
The 15-year fixed-rate mortgage averaged 5.84% APR, down nine basis points from the previous week's average.
The 5-year adjustable-rate mortgage averaged 6.46% APR, up 18 basis points from the previous week's average.
It was the third time in the last five weeks that fixed mortgage rates decreased. The 30-year fixed average reached its lowest level since September and was down 70 basis points from the peak at the end of October.
But rates are still more than double what they were at the beginning of the year, and they’re likely to go up again.
In its continuing effort to control inflation, the Federal Reserve will consider another rate hike at its December meeting. Since March, the Fed has raised the federal funds rate — the rate banks pay to borrow money from one another — by 3.75 percentage points, and mortgage rates have followed.
No one knows how much rates will have to increase overall — and how long they’ll remain that high — to hit the Fed’s target inflation rate of 2%.
"By any standard, inflation remains much too high," Federal Reserve Chair Jerome Powell said in a Nov. 30 speech at the Brookings Institution in Washington, D.C.
However, Powell said the full effects of this year's rate hikes have yet to be felt, so the Fed may moderate its aggressive pace of increases at the next meeting. That could mean a 0.50% hike to the federal funds rate — smaller than the recent 0.75%.
But the Fed is unlikely to pause rate increases altogether. "History cautions strongly against prematurely loosening policy," Powell said. "We will stay the course until the job is done."
Although you can't control average mortgage rates, you can shop around for the lowest rate. If you're planning to buy a home, compare at least three lenders to find the best deal.
And if you're thinking of buying a home down the road, work on paying down debt and saving money. Reducing debt will help elevate your credit score and lower your debt-to-income ratio. Lenders offer lower rates to borrowers with high credit scores, low debt-to-income ratios and substantial down payments.
» MORE: How to save for a down payment