A handful of important mortgage rates slid downward today. 15-year fixed and 30-year fixed mortgage rates both trended lower. For variable rates, the 5/1 adjustable-rate mortgage also declined. 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 this year. 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
For a 30-year, fixed-rate mortgage, the average rate you’ll pay is 4.10%, which is a decline of 15 basis points from one week ago. (A basis point is equivalent to 0.01%.) The most common loan term is a 30-year fixed mortgage. A 30-year fixed mortgage will often have a higher interest rate than a 15-year fixed rate mortgage — but also a lower monthly payment. 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 3.40%, which is a decrease of 7 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, as long as you’re able to afford the monthly payments. These include usually 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 adjustable-rate mortgage has an average rate of 4.09%, a downtick of 17 basis points from the same time last week. With an ARM mortgage, you’ll typically get a lower interest rate than a 30-year fixed mortgage for the first five years. However, 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. If you plan to sell or refinance your house before the rate changes, an adjustable-rate mortgage could make sense for you. 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
Though 2022 kicked off with low mortgage rates, there has been a steady rise recently. There are two major factors at play here: increasing inflation rates and a growing economy. That said, rates can always ebb and flow 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 information collected by Bankrate, which is owned by the same parent company as CNET, to track rate changes over time. This table summarizes the average rates offered by lenders across the country:
Today’s mortgage interest rates
Rates accurate as of Mar. 7, 2022.
How to find the best mortgage rates
When you are ready to apply for a loan, you can connect with a local mortgage broker or search online. Make sure to think about your current finances and your goals when searching for a mortgage. Things that affect what the interest rate you might get on your mortgage include: your credit score, down payment, loan-to-value ratio and your debt-to-income ratio. Having a higher 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. The interest rate isn’t the only factor that affects the cost of your home — be sure to also consider other costs such as fees, closing costs, taxes and discount points. Make sure to 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 best fit for you.
How does the loan term impact my mortgage?
When picking a mortgage, remember to consider the loan term, or payment schedule. The loan terms most commonly offered are 15 years and 30 years, although you can also find 10-, 20- and 40-year mortgages. Another important distinction is between fixed-rate and adjustable-rate mortgages. The interest rates in a fixed-rate mortgage are stable for the duration of the loan. For adjustable-rate mortgages, interest rates are fixed for a certain number of years (typically five, seven or 10 years), then the rate adjusts annually based on the current interest rate in the market.
One thing to consider when deciding between a fixed-rate and adjustable-rate mortgage is how long you plan on living 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 in the long term. If you don’t have plans to keep your new home for more than three to 10 years, however, an adjustable-rate mortgage could give you a better deal. The best loan term all depends on your personal situation and goals, so make sure to take into consideration what’s important to you when choosing a mortgage.
