A handful of mortgage rates surged today to the highest they’ve been since early 2020, including 15-year fixed and 30-year fixed mortgage rates. We also saw a significant rise in the average rate of 5/1 adjustable-rate mortgages. Mortgage rates have been quite low over the last period, making it a good time for prospective homebuyers to lock in a fixed rate. But rates are dynamic and are projected to continue to rise. Before you buy a house, remember to consider your personal needs and financial situation, and speak with multiple lenders to find the best one for you.
30-year fixed-rate mortgages
The 30-year fixed-mortgage rate average is 3.98%, which is an increase of 21 basis points as seven days ago. (A basis point is equivalent to 0.01%.) The most frequently used loan term is a 30-year fixed mortgage. A 30-year fixed rate mortgage will usually have a lower monthly payment than a 15-year one — but often a higher interest rate. Although you’ll pay more interest over time — you’re paying off your loan over a longer timeframe — if you’re looking for a lower monthly payment, a 30-year fixed mortgage may be a good option.
15-year fixed-rate mortgages
The average rate for a 15-year, fixed mortgage is 3.34%, which is an increase of 19 basis points from seven days ago. You’ll definitely have a larger monthly payment with a 15-year fixed mortgage compared to a 30-year fixed mortgage, even if the interest rate and loan amount are the same. However, as long as you can afford the monthly payments, there are several benefits to a 15-year loan. 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 3.99%, an increase of 24 basis points compared to last week. You’ll typically 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. However, shifts in the market may cause your interest rate to increase after that time, as detailed in the terms of your loan. For borrowers who plan to sell or refinance their house before the rate changes, an adjustable-rate mortgage might be a good option. If not, shifts in the market could significantly increase your interest rate.
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 and increase interest rates.
We use information 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||3.98%||3.77%||+0.21|
|15-year fixed rate||3.34%||3.15%||+0.19|
|30-year jumbo mortgage rate||2.85%||2.84%||+0.01|
|30-year mortgage refinance rate||4.01%||3.76%||+0.25|
Updated on Feb. 10, 2022.
How to find personalized mortgage rates
You can get a personalized mortgage rate by reaching out to your local mortgage broker or using an online calculator. Make sure to take into accountyour current financial situation and your goals when trying to find a mortgage. Things that affect what mortgage rate you might get include: your credit score, down payment, loan-to-value ratio and your debt-to-income ratio. Generally, you want a good credit score, a higher down payment, a lower DTI and a lower LTV to get a lower interest rate. Besides the mortgage rate, other costs including closing costs, fees, discount points and taxes might also impact the cost of your home. You should comparison shop with multiple lenders — like credit unions and online lenders in addition to local and national banks — in order to get a mortgage loan that’s the right fit for you.
What is a good loan term?
When picking a mortgage, you should 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. The interest rates in a fixed-rate mortgage are the same for the duration of the loan. Unlike a fixed-rate mortgage, the interest rates for an adjustable-rate mortgage are only the same for a certain amount of time (commonly five, seven or 10 years). After that, the rate adjusts annually based on the market interest rate.
When choosing between a fixed-rate and adjustable-rate mortgage, you should consider the length of time you plan to live in your home. For those who plan on staying long-term in a new house, fixed-rate mortgages may be the better option. Fixed-rate mortgages offer more stability over time in comparison to adjustable-rate mortgages, but adjustable-rate mortgages may offer lower interest rates upfront. However you may get a better deal with an adjustable-rate mortgage if you only intend to keep your home for a few years. The best loan term all all depends on your situation and goals, so make sure to take into consideration what’s important to you when choosing a mortgage.