A few notable mortgage rates moved up today. There’s been a staggering gain in 30-year fixed mortgage rates, and 15-year fixed rates made gains as well. At the same time, average rates for 5/1 adjustable-rate mortgages also went up.
Mortgage rates have been slowly rising since the start of this year, and are expected to increase throughout 2022. While rates are above their historic records set earlier in the pandemic, they’re still relatively low. Interest rates are dynamic – they rise and fall on a daily basis due to numerous economic factors. In general, now is a good time for prospective homebuyers to lock in a lower rate rather than later this year. Speaking with multiple lenders will help you find the best rate available for your financial situation.
30-year fixed-rate mortgages
For a 30-year, fixed-rate mortgage, the average rate you’ll pay is 4.91%, which is a growth of 35 basis points from 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 mortgage will usually have a greater 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 4.07%, which is an increase of 19 basis points from the same time last week. 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. However, if you can afford the monthly payments, there are several benefits to a 15-year loan. You’ll usually 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 4.91%, a climb of 37 basis points compared to a week ago. 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 shifts with the market rate, you may end up paying more after that time, as described in the terms of your loan. Because of this, an adjustable-rate mortgage may 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 could be on the hook for a significantly higher interest rate if the market rates change.
Mortgage rate trends
Though 2022 began with low mortgage rates, there has been a steady rise recently, and rates are expected to continue climbing throughout 2022. Home loan rates are influenced by multiple economic factors. A major one is government policy set by the Federal Reserve, which raised rates in March for the first time since 2018 in response to record-high inflation. The Fed anticipates raising interest rates six more times this year. However, with the ongoing war in Ukraine, we’ve seen some fluctuations in mortgage rates, as global instability generally causes interest rates to drop. While you can expect rates to go up and down for these reasons, in general, if you’re looking to buy a house in 2022, you should be prepared for interest rates to keep going higher. We use data 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:
Average mortgage interest rates
| Product | Rate | Last week | Change |
|---|---|---|---|
| 30-year fixed | 4.91% | 4.56% | +0.35 |
| 15-year fixed | 4.07% | 3.88% | +0.19 |
| 30-year jumbo mortgage rate | 3.34% | 3.26% | +0.08 |
| 30-year mortgage refinance rate | 4.89% | 4.52% | +0.37 |
Rates as of Apr. 4, 2022.
How to find the best mortgage rates
You can get a personalized mortgage rate by connecting with your local mortgage broker or using an online calculator. In order to find the best home mortgage, you’ll need to take into account your goals and overall financial situation. Specific interest rates will vary based on factors including credit score, down payment, debt-to-income ratio and loan-to-value 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. Besides the interest rate, factors including closing costs, fees, discount points and taxes might also factor into the cost of your house. Make sure to comparison shop with multiple lenders — including credit unions and online lenders in addition to local and national banks — in order to get a mortgage loan that works best 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. Unlike a fixed-rate mortgage, the interest rates for an adjustable-rate mortgage are only fixed for a certain amount of time (commonly five, seven or 10 years). After that, the rate adjusts annually based on the market rate.
One important factor to consider when deciding between a fixed-rate and adjustable-rate mortgage is how long you plan on staying in your house. Fixed-rate mortgages might be a better fit for people who plan on staying in a home for a while. While adjustable-rate mortgages might offer lower interest rates upfront, fixed-rate mortgages are more stable in the long term. However you may get a better deal with an adjustable-rate mortgage if you only have plans to keep your home for a couple years. There is no best loan term as a general rule; it all depends on your goals and your current financial situation. Make sure to do your research and understand your own priorities when choosing a mortgage.
