A variety of notable mortgage rates climbed today. There’s been a swift growth in 30-year fixed mortgage rates, and 15-year fixed rates increased, as well. We saw a slight 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 5.78%, which is a growth of 33 basis points compared to 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 rate mortgage will usually have a smaller monthly payment than a 15-year one — but often 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 4.91%, which is an increase of 25 basis points from seven days ago. You’ll definitely have a higher 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 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 3.94%, a rise of 3 basis points from the same time last week. You’ll typically get a lower interest rate (compared to a 30-year fixed mortgage) with a 5/1 adjustable-rate mortgage in the first five years of the mortgage. However, changes in the market might cause your interest rate to increase after that time, as detailed in the terms of your loan. For borrowers who plan to sell or refinance their house before the rate changes, an adjustable-rate mortgage could be a good option. If not, changes in the market might significantly increase your interest rate.
Mortgage rate trends
Though 2022 began 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 rising.
We use information collected by Bankrate, which is owned by the same parent company as CNET, to track changes in these daily rates. This table summarizes the average rates offered by lenders across the country:
Today’s mortgage interest rates
Rates accurate as of June 13, 2022.
How to find the best mortgage rates
To find a personalized mortgage rate, meet with your local mortgage broker or use an online mortgage service. When researching home mortgage rates, think about your goals and current financial situation. Things that affect what mortgage rate you might get include: your credit score, down payment, loan-to-value ratio and your debt-to-income 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. Apart from the interest rate, other factors including closing costs, fees, discount points and taxes might also impact the cost of your house. You should speak with several different lenders — such as local and national banks, credit unions and online lenders — and comparison shop to find the best mortgage loan for you.
What’s the best loan term?
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. Mortgages are further divided into fixed-rate and adjustable-rate mortgages. The interest rates in a fixed-rate mortgage are the same for the duration of the loan. Unlike a fixed-rate mortgage, the interest rates for an adjustable-rate mortgage are only the same for a certain amount of time (usually five, seven or 10 years). After that, the rate adjusts annually based on the market interest rate.
One factor to take into consideration when deciding between a fixed-rate and adjustable-rate mortgage is the length of time you plan on staying in your house. 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. If you aren’t planning to keep your new house for more than three to 10 years, however, an adjustable-rate mortgage may 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.
