A variety of notable mortgage rates moved higher today. The average interest rates for both 15-year fixed and 30-year fixed mortgages both drifted higher. We also saw an increase in the average rate of 5/1 adjustable-rate mortgages.
Mortgage rates have been slowly rising since the start of this year, and are expected to increase throughout 2022. Rates are now closer to 2018 levels than the historic lows seen during the height of the pandemic. Interest rates are dynamic — they rise and fall on a daily basis depending on 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 5.57%, which is an increase of 12 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 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 4.81%, which is an increase of 16 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 higher monthly payment. But a 15-year loan will usually be the better deal, if you can afford the monthly payments. 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 adjustable-rate mortgage has an average rate of 5.55%, a climb of 12 basis points from seven days ago. For the first five years, you’ll usually get a lower interest rate with a 5/1 ARM compared to a 30-year fixed mortgage. But you might end up paying more after that time, depending on the terms of your loan and how the rate shifts with the market rate. 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 may be on the hook for a significantly higher interest rate if the market rates change.
Mortgage rate trends
While 2022 kicked off with low mortgage rates, there has been an uptick in recent months, and rates are expected to continue climbing throughout 2022. Home loan rates are influenced by various 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, so if you’re looking to buy a house in 2022, you should be prepared for interest rates to keep moving up.
We use rates 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 US:
Average mortgage interest rates
| Product | Rate | Last week | Change |
|---|---|---|---|
| 30-year fixed | 5.57% | 5.45% | +0.12 |
| 15-year fixed | 4.81% | 4.65% | +0.16 |
| 30-year jumbo mortgage rate | 3.80% | 3.71% | +0.09 |
| 30-year mortgage refinance rate | 5.53% | 5.39% | +0.14 |
Rates as of May. 10, 2022.
How to find the best mortgage rates
To find a personalized mortgage rate, speak to your local mortgage broker or use an online mortgage service. Make sure to take into account your current financial situation and your goals when looking for a mortgage. Specific interest rates will vary based on factors including credit score, down payment, debt-to-income ratio and loan-to-value ratio. Having a good 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. Apart from the interest rate, other factors including closing costs, fees, discount points and taxes might also affect the cost of your home. Make sure to shop around with multiple lenders — for example, 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, you should 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. 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. For adjustable-rate mortgages, interest rates are set for a certain number of years (commonly five, seven or 10 years), then the rate changes annually based on the market rate.
One factor to think about when choosing between a fixed-rate and adjustable-rate mortgage is the length of time you plan on living in your home. For people who 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 compared to adjustable-rate mortgages, but adjustable-rate mortgages can sometimes offer lower interest rates upfront. However you could get a better deal with an adjustable-rate mortgage if you only intend to keep your home 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. Make sure to do your research and understand what’s most important to you when choosing a mortgage.
