Mortgage Rates Spike Again to Highest Levels Since 2008 | Mortgages and Advice


Mortgage rates surged higher this week, according to Freddie Mac, continuing a monthlong trend of rate increases. The average interest rate on a fixed 30-year mortgage is the highest it’s been since 2008, at 5.89%. For the 15-year fixed mortgage term, rates eclipsed 5% for the first time in 13 years.

Borrowing costs for the 5/1 adjustable-rate mortgage also rose this week, although they remain lower than fixed rates – as a result, more homebuyers have been turning to ARMs in recent weeks, data from the Mortgage Bankers Association shows. Here are the current mortgage interest rates, as of Sept. 8:

  • 30-year fixed: 5.89% with 0.7 point (up from 5.66% a week ago, up from 2.88% a year ago).
  • 15-year fixed: 5.16% with 0.8 point (up from 4.98% a week ago, up from 2.19% a year ago).
  • 5/1-year adjustable: 4.64% with 0.4 point (up from 4.51% a week ago, up from 2.42% a year ago).

Erika Giovanetti

“Mortgage rates rose again as markets continue to manage the prospect of more aggressive monetary policy to combat elevated inflation. Not only are mortgage rates rising, but the dispersion of rates also has increased, meaning that borrowers can benefit from shopping around for a better rate. Our research indicates that borrowers could save an average of $1,500 over the life of a loan by getting one additional rate quote and an average of about $3,000 if they get five quotes.”

– Sam Khater, Freddie Mac’s chief economist, in a Sept. 8 statement

It may be an understatement to say that homebuyers today are in a much different situation than they were in just a year ago. Short of building a time machine, there’s not much mortgage applicants can do to lock in that coveted sub-3% interest rate that fueled the housing market in 2021, as mentioned in last week’s column.

Although today’s buyers are stuck in a much less favorable rate environment, there is one money-saving tool at their disposal – mortgage rate shopping. That’s especially true when you consider the dispersion that Khater mentions, which is the spread between the highest and lowest rates offered to similar applicants. You can see how the monthly payments and overall interest charges are impacted by small rate changes in the table below.

Quote 1Quote 2Quote 3
Mortgage rate5.75%5.9%6.05%
Monthly payment$1,867$1,898$1,928
Total interest paid$352,535$363,316$374,953

Estimated loan costs for a 30-year, fixed-rate mortgage on a $400,000 home with 20% down.

That’s not to say that comparing offers will get you a one- or two-point difference on your mortgage rate. But saving just a fraction of a point in interest can translate to thousands of dollars’ worth of savings over the life of your home loan.

Indicator of the Week: Shop Until Your Rate Drops

With mortgage rates on the rise once again, it’s now more important than ever to compare loan offers from multiple lenders. In a volatile rate environment, shopping around for the lowest possible interest rate could save you in the short term (on your monthly payment) and in the long term (on total interest payments). Here’s how rate shopping works:

  • Reach out to at least three lenders. Try a mix of types of lenders, as well – for example, banks, credit unions and online-only lenders. Additionally, getting in touch with your local mortgage loan officer may help bring you a better understanding of any state, county or city housing authority programs designed to save you money.
  • Get a mortgage preapproval from each one. Keep your rate shopping within a 45-day window to minimize the negative impact to your credit score. Multiple inquiries in this time period will count as a single inquiry, according to the FICO scoring model.
  • Compare loan estimates. You’ll want to look at the interest rate as well as the annual percentage rate, or APR, which includes the total cost of borrowing the loan (including interest and fees). Keep a close eye on miscellaneous closing costs, and see if any of the lenders on your short list offer any kind of down payment assistance.

With several loan offers in hand, you can choose the home loan with the lowest possible mortgage rate for your financial situation. But manage your expectations, because it’s unlikely that you’ll find a rate today that compares to the average rates of last year.



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