A few important mortgage rates declined today. The average interest rates for both 15-year fixed and 30-year fixed mortgages went down.
Still, 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
The average interest rate for a standard 30-year fixed mortgage is 5.38%, which is a decrease of 4 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 often 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 4.67%, which is a decrease of 10 basis points from seven days 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. However, if you’re able to afford the monthly payments, there are several benefits to a 15-year loan. 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.
Mortgage rate trends
Though 2022 kicked off with low mortgage rates, there has been a steady rise in recent months, and rates will likely continue increasing throughout 2022. Home loan rates are influenced by various economic factors. A major one is government policy set by the Fed, which raised rates by half a percentage point in May 2022, the highest increase in 22 years, in response to record-high inflation. This was the second rate increase by the Fed and several more are expected throughout the year. So, if you’re looking to buy a house in 2022, expect mortgage rates to keep ticking up.
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 nationwide:
Average mortgage interest rates
| Product | Rate | Last week | Change |
|---|---|---|---|
| 30-year fixed | 5.38% | 5.42% | -0.04 |
| 15-year fixed | 4.67% | 4.77% | -0.10 |
| 30-year jumbo mortgage rate | 3.92% | 3.84% | +0.08 |
| 30-year mortgage refinance rate | 5.37% | 5.35% | +0.02 |
Rates as of May 24, 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 consider 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. Generally, you want a good credit score, a larger 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. Be 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 loan that’s best for you.
What is a good loan term?
One important thing you should consider when choosing a mortgage is the loan term, or payment schedule. The most common loan 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. For fixed-rate mortgages, interest rates are the same for the life of the loan. Unlike a fixed-rate mortgage, the interest rates for an adjustable-rate mortgage are only set for a certain amount of time (usually five, seven or 10 years). After that, the rate changes annually based on the market interest rate.
One factor to consider when deciding between a fixed-rate and adjustable-rate mortgage is how long you plan on living in your house. If you plan on staying long-term in a new house, fixed-rate mortgages may be the better option. Fixed-rate mortgages offer greater stability over time compared to adjustable-rate mortgages, but adjustable-rate mortgages can sometimes offer lower interest rates upfront. If you aren’t planning to keep your new home for more than three to 10 years, though, an adjustable-rate mortgage may give you a better deal. The best loan term is entirely dependent on your situation and goals, so be sure to consider what’s important to you when choosing a mortgage.
