Key mortgage rates, including 15-year fixed and 30-year fixed mortgages, are continuing to climb to the highest levels since before the pandemic. The average rate of 5/1 adjustable-rate mortgages has also gone up. With mortgage rates at historic lows over the last period, it’s been a fine time for prospective homebuyers to lock in a fixed rate. However, rates fluctuate and are projected to keep going up. Before you buy a house, consider your personal needs and financial situation, and remember to speak with multiple lenders to find the best one for you.
30-year fixed-rate mortgages
The average interest rate for a standard 30-year fixed mortgage is 3.68%, which is an increase of 10 basis points from one week ago. (A basis point is equivalent to 0.01%.) Thirty-year fixed mortgages are the most frequently used loan term. A 30-year fixed mortgage will usually have a higher interest rate than a 15-year fixed rate mortgage — but also a lower monthly payment. You won’t be able to pay off your house as quickly and you’ll pay more interest over time, but a 30-year fixed mortgage is a good option if you’re looking to minimize your monthly payment.
15-year fixed-rate mortgages
The average rate for a 15-year, fixed mortgage is 3.02%, which is an increase of 11 basis points from seven days ago. Compared to a 30-year fixed mortgage, a 15-year fixed mortgage with the same loan value and interest rate will have a larger monthly payment. But a 15-year loan will usually be the better deal, if you’re able to afford the monthly payments. These include typically being able to get a lower interest rate, paying off your mortgage sooner, and paying less total interest in the long run.
5/1 adjustable-rate mortgages
A 5/1 ARM has an average rate of 3.67%, a rise of 9 basis points from the same time last week. You’ll usually get a lower interest rate (compared to a 30-year fixed mortgage) with a 5/1 adjustable-rate mortgage in the first five years of the mortgage. But you might end up paying more after that time, depending on the terms of your loan and how the rate changes with the market rate. If you plan to sell or refinance your house before the rate changes, an ARM may make sense for you. Otherwise, changes in the market means your interest rate may be much higher once the rate adjusts.
Mortgage rate trends
While 2022 kicked off with low mortgage rates, they have seen an uptick recently. There are two major factors at play here: increasing inflation rates and a growing economy. That said, rates can always rise and fall for a variety of reasons. The spread of omicron, for instance, kept rates relatively low throughout December and the start of the new year. Overall, rates are expected to go up in 2022, particularly with the Federal Reserve’s decision to reduce its bond purchases.
We use data collected by Bankrate, which is owned by the same parent company as CNET, to track rates changes over time. This table summarizes the average rates offered by lenders across the country:
Current average mortgage interest rates
|Loan type||Interest rate||A week ago||Change|
|30-year fixed rate||3.68%||3.58%||+0.10|
|15-year fixed rate||3.02%||2.91%||+0.11|
|30-year jumbo mortgage rate||2.79%||2.77%||+0.02|
|30-year mortgage refinance rate||3.67%||3.57%||+0.10|
Updated on Jan. 25, 2022.
How to shop for the best mortgage rate
To find a personalized mortgage rate, speak to your local mortgage broker or use an online mortgage service. In order to find the best home mortgage, you’ll need to consider your goals and overall financial situation. A range of factors — including your down payment, credit score, loan-to-value ratio and debt-to-income ratio — will all affect the interest rate on your mortgage. Having a good credit score, a larger down payment, a low DTI, a low LTV, or any combination of those factors can help you get a lower interest rate. Aside from the interest rate, other costs including closing costs, fees, discount points and taxes might also impact the cost of your home. You should talk to a variety of lenders — like local and national banks, credit unions and online lenders — and comparison shop to find the best mortgage loan for you.
How does the loan term impact my mortgage?
When picking a mortgage, remember to consider the loan term, or payment schedule. The most common loan terms are 15 years and 30 years, although 10-, 20- and 40-year mortgages also exist. Mortgages are further divided into fixed-rate and adjustable-rate mortgages. For fixed-rate mortgages, interest rates are set for the life of the loan. For adjustable-rate mortgages, interest rates are stable for a certain number of years (most frequently five, seven or 10 years), then the rate changes annually based on the market interest rate.
When choosing between a fixed-rate and adjustable-rate mortgage, you should consider how long you plan to live in your home. Fixed-rate mortgages might be a better fit for those who plan on living in a home for quite some time. While adjustable-rate mortgages might have lower interest rates upfront, fixed-rate mortgages are more stable in the long term. If you don’t plan to keep your new home for more than three to 10 years, however, an adjustable-rate mortgage may give you a better deal. The best loan term is entirely dependent on your own situation and goals, so make sure to think about what’s important to you when choosing a mortgage.