A couple of closely followed mortgage rates went up today. Though average 15-year fixed mortgage rates dwindled a bit, there was a rise in average 30-year fixed mortgage rates and 5/1 adjustable-rate mortgages. Although mortgage rates fluctuate and have been higher in the last several months, it might be a good time for prospective homebuyers to secure a fixed rate. Before you purchase a home, remember to consider your personal needs and financial situation, and compare offers from various lenders to find the right one for you.
30-year fixed-rate mortgages
The average interest rate for a standard 30-year fixed mortgage is 4.25%, which is an increase of 6 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 rate mortgage will usually have a smaller monthly payment than a 15-year one — but usually 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 3.47%, which is a decrease of 1 basis point 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 can afford the monthly payments. You’ll most likely 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 adjustable-rate mortgage has an average rate of 4.25%, a rise of 5 basis points from the same time last week. For the first five years, you’ll usually get a lower interest rate with a 5/1 adjustable-rate mortgage compared to a 30-year fixed mortgage. However, shifts in the market may cause your interest rate to increase after that time, as detailed in the terms of your loan. Because of this, an ARM could be a good option if you plan to sell or refinance your house before the rate changes. But if that’s not the case, you might be on the hook for a much higher interest rate if the market rates shift.
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 increase interest rates.
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 US:
Current average mortgage interest rates
| Loan type | Interest rate | A week ago | Change |
|---|---|---|---|
| 30-year fixed rate | 4.25% | 4.19% | +0.06 |
| 15-year fixed rate | 3.47% | 3.48% | -0.01 |
| 30-year jumbo mortgage rate | 2.93% | 2.93% | N/C |
| 30-year mortgage refinance rate | 4.21% | 4.20% | +0.01 |
Updated on Feb. 25, 2022.
How to find the best mortgage rates
To find a personalized mortgage rate, talk to your local mortgage broker or use an online mortgage service. When shopping around for home mortgage rates, consider your goals and current financial situation. Things that affect what mortgage interest 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. The interest rate isn’t the only factor that affects the cost of your home — be sure to also consider additional factors such as fees, closing costs, taxes and discount points. Make sure you talk to a variety of lenders — such as local and national banks, credit unions and online lenders — and comparison shop to find the best mortgage for you.
What’s the best loan term?
One important factor to consider when choosing a mortgage is 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. Mortgages are further divided into fixed-rate and adjustable-rate mortgages. The interest rates in a fixed-rate mortgage are set for the duration of the loan. Unlike a fixed-rate mortgage, the interest rates for an adjustable-rate mortgage are only fixed for a certain amount of time (most frequently five, seven or 10 years). After that, the rate changes annually based on the market rate.
When choosing between a fixed-rate and adjustable-rate mortgage, you should think about how long you plan to stay in your house. If you plan on living 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 might offer lower interest rates upfront. If you don’t have plans to keep your new home for more than three to 10 years, however, an adjustable-rate mortgage might give you a better deal. The best loan term all depends on your own situation and goals, so make sure to think about what’s important to you when choosing a mortgage.
