Despite a hike in June, mortgage rates are holding steady below 6%. But will that continue?

Mortgage rates have been holding below 6% for weeks now. The national average for 15-year fixed-rate mortgage loans is 5.05%, while 30-year fixed mortgages rose just a bit to 5.96%, according to Bankrate data from July 20. (See the lowest mortgage rates you can get now here). 

But will they continue to level off or are we headed for more rate increases? The Fed is expected to raise rates, possibly 1%, at its next meeting in July, and we explored what that might do to mortgage rates in this story this week. While the Fed doesn’t set mortgage rates, and there is not a direct relationship between the central bank’s moves and what happens with mortgage rates, Fed moves often have some impact.

For this part, Greg McBride, chief financial analyst at Bankrate, told MarketWatch Picks: “The prospect of the Fed front-loading their interest rate hikes and doing more sooner rather than later, may actually help keep a lid on mortgage rates or even bring them down.” In fact, more rate hikes now means fewer rate hikes later, which means the timetable for peak interest rates gets moved up and the eventual decline in rates due to a weak economy also happens sooner, he notes. “But all of this depends on, and even assumes, that inflation peaks very soon. If not, all bets are off,” says McBride.

How to save on a mortgage now

Whatever happens with rates, there are ways to save. To get the lowest rates possible, shorten your loan term if you can. Rates on 15-year mortgages continue to be lower than 30-year mortgages. You may also want to consider an adjustable rate mortgages (ARM), but only if it makes sense for your long term plans. The latest Bankrate data shows that average rates on 5/1 ARMS (rates are fixed for five years, then adjust) are 4.26%, lower at the start than both the 15-year and 30-year fixed rate mortgages. But, there’s a caveat: ARMs tend to make the most sense for short-term homeowners who only plan to be in the same home for 5 to 7 years. Because ARM rates become variable, “ARMs can be risky, and in the long run they may end up costing more than a fixed mortgage with a higher upfront rate,” says Jacob Channel, LendingTree’s senior economic analyst, recently told MarketWatch Picks.

If you opt for a 15-year fixed, 30-year fixed or an ARM, experts recommend shopping around, getting quotes from 3 to 5 lenders and figuring out your credit score (improve it if needed) and debt-to-income ratio (DTI), which can help you determine what rate you can expect to pay. To calculate your DTI, divide your monthly debt payments (mortgage; credit card payments; auto, student or personal loans; child support) by your gross monthly income. If the number you come out with is at or below 36%, your chances of qualifying for a mortgage, and at a better rate, are better than if you come out with a higher number as your DTI.

There are also other ways to bring your mortgage rate down. Buying discount points, which are fees paid to reduce an interest rate, can make a big difference if you can afford it. Typically, one point decreases the interest rate by 0.25%, though this can vary. “When you pay discount points, you’re handing the lender a chunk of interest payments up front in exchange for paying less interest every month,” Holden Lewis, home and mortgage expert at Nerdwallet, recently told MarketWatch Picks. But note that there may be limits to how many discount points you can buy, and buying points may not make sense, especially if you don’t plan to stay in the home for long.