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 4.19%, which is a growth of 20 basis points compared to one week ago. (A basis point is equivalent to 0.01%.) Thirty-year fixed mortgages are the most common loan term. A 30-year fixed rate mortgage will usually have a lower monthly payment than a 15-year one — but often a higher interest rate. 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 3.48%, which is an increase of 15 basis points compared to a week ago. You’ll definitely have a bigger 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. But a 15-year loan will usually be the better deal, if you can afford the monthly payments. You’ll typically get a lower interest rate, and you’ll pay less interest in total because you’re paying off your mortgage much quicker.
5/1 adjustable-rate mortgages
A 5/1 ARM has an average rate of 4.20%, a climb of 20 basis points from the same time last week. With an ARM mortgage, you’ll usually get a lower interest rate than a 30-year fixed mortgage for the first five years. But since the rate changes with the market rate, you might end up paying more after that time, as described in the terms of your loan. Because of this, an adjustable-rate mortgage could be a good option if you plan to sell or refinance your house before the rate changes. 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 daily mortgage rate trends. This table summarizes the average rates offered by lenders across the US:
Current average mortgage interest rates
|Loan type||Interest rate||A week ago||Change|
|30-year fixed rate||4.19%||3.99%||+0.20|
|15-year fixed rate||3.48%||3.33%||+0.15|
|30-year jumbo mortgage rate||2.93%||2.86%||+0.07|
|30-year mortgage refinance rate||4.20%||4.02%||+0.18|
Updated on Feb. 18, 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 current finances. 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 higher credit score, a higher down payment, a lower DTI and a lower LTV to get a lower interest rate. Besides the mortgage interest rate, additional costs including closing costs, fees, discount points and taxes might also factor into the cost of your home. Make sure you talk to several different lenders — such as 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, you should consider the loan term, or payment schedule. The most common mortgage terms are 15 years and 30 years, although 10-, 20- and 40-year mortgages also exist. Another important distinction is between fixed-rate and adjustable-rate mortgages. The interest rates in a fixed-rate mortgage are set for the duration of the loan. For adjustable-rate mortgages, interest rates are the same for a certain number of years (usually 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 think about how long you plan to stay in your home. For people who plan on staying long-term in a new house, fixed-rate mortgages may be the better option. While adjustable-rate mortgages might offer lower interest rates upfront, fixed-rate mortgages are more stable over time. However you may get a better deal with an adjustable-rate mortgage if you’re only planning to keep your house for a few years. There is no best loan term as a rule of thumb; it all depends on your goals and your current financial situation. Be sure to do your research and know your own priorities when choosing a mortgage.