Some principal mortgage rates decreased today: 15-year fixed and 30-year fixed mortgage rates both moved down. However, the average rate of the most common type of variable-rate mortgage, the 5/1 adjustable-rate mortgage, climbed.
Mortgage rates have been consistently going up since the start of this year, and are expected to keep climbing throughout 2022. Of course, interest rates are dynamic and unpredictable — at least on a daily or weekly basis — as they respond to a wide variety of economic factors. At the moment, two of those factors — inflation and the federal funds rate — are particularly influential. The Federal Reserve has already increased interest rates three times this year and has signaled its intention to hike rates again to contain inflation. That will almost certainly translate into higher mortgage rates and, for prospective borrowers, steeper monthly mortgage payments. As such, homebuyers may have better luck locking in a lower mortgage interest rate sooner than later. It’s always a good idea to interview multiple lenders to compare rates and fees to find the best mortgage for your specific situation.
30-year fixed-rate mortgages
The average 30-year fixed mortgage interest rate is 5.90%, which is a decrease of 11 basis points compared to one week 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 lower monthly payment than a 15-year one — but often a higher interest rate. You won’t be able to pay off your house as quickly and you’ll pay more interest over time, but a 30-year fixed mortgage is a good option if you’re looking to minimize your monthly payment.
15-year fixed-rate mortgages
The average rate for a 15-year, fixed mortgage is 5.14%, which is a decrease of 13 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 bigger monthly payment. However, if you can 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.
5/1 adjustable-rate mortgages
A 5/1 adjustable-rate mortgage has an average rate of 4.30%, a rise of 12 basis points from seven days ago. You’ll usually get a lower interest rate (compared to a 30-year fixed mortgage) with a 5/1 ARM in the first five years of the mortgage. However, you may end up paying more after that time, depending on the terms of your loan and how the rate changes with the market rate. For borrowers who plan to sell or refinance their house before the rate changes, an adjustable-rate mortgage may be a good option. Otherwise, changes in the market means your interest rate might be a good deal higher once the rate adjusts.
Mortgage rate trends
Though mortgage rates were historically low at the beginning of 2022, they have been increasing steadily since then. The reason: The Federal Reserve has raised interest rates by 0.75 percentage points just this month — the highest rate increase since 1994 — in an attempt to curb record-high inflation. As a general rule, when inflation is low, mortgage rates tend to be lower. When inflation is high, rates tend to be higher.
Though the Fed does not directly set mortgage rates, the central bank’s policy actions influence how much you pay to finance your home loan. And the Fed has signaled it will continue to raise rates over the course of this year. So, if you’re looking to buy a house in 2022, expect mortgage rates to increase as the year goes on.
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:
Today’s mortgage interest rates
Rates accurate as of June 28, 2022.
How to find the best mortgage rates
You can get a personalized mortgage rate by reaching out to your local mortgage broker or using an online calculator. Make sure to think about your current financial situation and your goals when searching for a mortgage. Specific mortgage 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. Besides the mortgage rate, additional costs including closing costs, fees, discount points and taxes might also impact the cost of your house. You should speak with several different lenders — including 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, it’s important to consider 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. Mortgages are further divided into fixed-rate and adjustable-rate mortgages. For fixed-rate mortgages, interest rates are set for the life of the loan. For adjustable-rate mortgages, interest rates are the same for a certain number of years (commonly five, seven or 10 years), then the rate adjusts annually based on the market interest rate.
One important factor to take into consideration when choosing 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 those who plan on staying in a home for a while. Fixed-rate mortgages offer greater stability over time in comparison to adjustable-rate mortgages, but adjustable-rate mortgages can sometimes offer lower interest rates upfront. However you may 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 general rule; it all depends on your goals and your current financial situation. It’s important to do your research and know what’s most important to you when choosing a mortgage.
