A few major mortgage rates saw growth today. The average interest rates for both 15-year fixed and 30-year fixed mortgages both trended upward. At the same time, average rates for 5/1 adjustable-rate mortgages also lifted.
30-year fixed-rate mortgages
The average interest rate for a standard 30-year fixed mortgage is 4.55%, which is a growth of 22 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 mortgage will often 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 3.78%, which is an increase of 22 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 larger monthly payment. 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.
5/1 adjustable-rate mortgages
A 5/1 adjustable-rate mortgage has an average rate of 4.58%, an increase of 23 basis points from seven days ago. For the first five years, you’ll typically get a lower interest rate with a 5/1 adjustable-rate mortgage compared to a 30-year fixed mortgage. However, 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. If you plan to sell or refinance your house before the rate changes, an adjustable-rate mortgage may make sense for you. Otherwise, shifts in the market means your interest rate might be much higher once the rate adjusts.
Mortgage rate trends
While 2022 kicked off with low mortgage rates, there has been an increase recently, and rates are expected to continue increasing throughout 2022. Home loan rates are influenced by different 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. However, with the ongoing war in Ukraine, we’ve seen some fluctuations in mortgage rates, as global instability generally causes interest rates to drop. While you can expect rates to go up and down for these reasons, in general, if you’re looking to buy a house in 2022, you should be prepared for interest rates to keep rising. 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:
Today’s mortgage interest rates
|Loan term||Today’s Rate||Last week||Change|
|30-year mortgage rate||4.55%||4.33%||+0.22|
|15-year fixed rate||3.78%||3.56%||+0.22|
|30-year jumbo mortgage rate||3.14%||2.93%||+0.21|
|30-year mortgage refinance rate||4.53%||4.33%||+0.20|
Rates accurate as of March 21, 2022.
How to find the best mortgage rates
When you are ready to apply for a loan, you can connect with a local mortgage broker or search online. Make sure to consider your current finances and your goals when searching for a mortgage. A range of factors — including your down payment, credit score, loan-to-value ratio and debt-to-income ratio — will all affect your mortgage interest rate. Generally, you want a higher credit score, a higher down payment, a lower DTI and a lower LTV to get a lower interest rate. Beyond the interest rate, additional costs including closing costs, fees, discount points and taxes might also impact the cost of your house. You should speak with a variety of lenders — for example, local and national banks, credit unions and online lenders — and comparison shop to find the best loan for you.
What’s the best loan term?
When picking a mortgage, you should 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. The interest rates in a fixed-rate mortgage are fixed 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 (commonly five, seven or 10 years). After that, the rate changes annually based on the market interest rate.
One important factor to think about when deciding between a fixed-rate and adjustable-rate mortgage is the length of time you plan on living in your house. For those who plan on living long-term in a new house, fixed-rate mortgages may be the better option. While adjustable-rate mortgages might offer lower interest rates upfront, fixed-rate mortgages are more stable over time. However you could get a better deal with an adjustable-rate mortgage if you only intend to keep your house for a couple years. There is no best loan term as a general rule; it all depends on your goals and your current financial situation. Be sure to do your research and know what’s most important to you when choosing a mortgage.