A couple of principal mortgage rates declined today: 15-year fixed and 30-year fixed mortgage rates both decreased. The average rate of the most common type of variable-rate mortgage, the 5/1 adjustable-rate mortgage, also decreased.
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 interest rate for a standard 30-year fixed mortgage is 5.62%, which is a decrease of 28 basis points from one week ago. (A basis point is equivalent to 0.01%.) Thirty-year fixed mortgages are the most frequently used loan term. A 30-year fixed mortgage will usually have a higher 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 4.86%, which is a decrease of 28 basis points from seven days ago. 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. But a 15-year loan will usually be the better deal, as long as you can afford the monthly payments. You’ll typically 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 ARM has an average rate of 4.27%, a fall of 3 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 may end up paying more after that time, depending on the terms of your loan and how the rate changes with the market rate. If you plan to sell or refinance your house before the rate changes, an ARM could make sense for you. If not, shifts in the market might significantly increase your interest rate.
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 information collected by Bankrate, which is owned by the same parent company as CNET, to track daily mortgage rate trends. This table summarizes the average rates offered by lenders across the country:
Current average mortgage interest rates
| Loan type | Interest rate | A week ago | Change |
|---|---|---|---|
| 30-year fixed rate | 5.62% | 5.90% | -0.28 |
| 15-year fixed rate | 4.86% | 5.14% | -0.28 |
| 30-year jumbo mortgage rate | 5.54% | 5.87% | -0.33 |
| 30-year mortgage refinance rate | 5.61% | 5.85% | -0.24 |
Updated on July 5, 2022.
How to shop for the best mortgage rate
You can get a personalized mortgage rate by connecting with your local mortgage broker or using an online calculator. Make sure to take into account your current financial situation and your goals when trying to find a mortgage. Things that affect what mortgage interest rate you might get include: your credit score, down payment, loan-to-value ratio and your debt-to-income 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 impact the cost of your home. Make sure you speak with a variety of lenders — including local and national banks, credit unions and online lenders — and comparison shop to find the best mortgage for you.
How does the loan term impact my mortgage?
One important factor to consider when choosing a mortgage is 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 fixed for the duration of the loan. For adjustable-rate mortgages, interest rates are stable for a certain number of years (most frequently five, seven or 10 years), then the rate changes annually based on the market interest rate.
One factor to think about when deciding between a fixed-rate and adjustable-rate mortgage is the length of time you plan on staying in your house. Fixed-rate mortgages might be a better fit if you plan on staying in a home for a while. Fixed-rate mortgages offer more stability over time in comparison to adjustable-rate mortgages, but adjustable-rate mortgages might offer lower interest rates upfront. If you don’t have plans to keep your new home for more than three to 10 years, however, an adjustable-rate mortgage may give you a better deal. 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 think about your own priorities when choosing a mortgage.
