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Current 20-Year Mortgage Rates for June 2022

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What Is a 20-Year Fixed-Rate Mortgage?

A 20-year, fixed-rate mortgage is a home loan with a 20-year repayment period and a mortgage rate that will never change. With a 20-year mortgage, you’ll pay off the loan 10 years sooner than you would with the most popular type of home loan: the 30-year, fixed-rate mortgage.

So this type of mortgage can be good for homebuyers who want to be debt free more quickly and have the income to manage the higher payments that come with a shorter loan repayment term.

The Latest Housing News

What’s Going On With Rising Mortgage Rates?

The surge in mortgage rates so far this year is due to a variety of economic factors. Persistently high inflation is a big one, Jacob Channel, senior economic analyst at LendingTree told us. May’s inflation report shows 8.6% inflation and the highest in 40 years. In response, the Federal Reserve increased its benchmark short-term interest rate to combat that inflation. The Fed raised rates by 50 basis points in May and by 75 points in June, since inflation remained higher than expected.

Recently, we saw mortgage rates surge after the inflation report and ahead of the Fed’s announcement. “I think what we’re seeing is that lenders had already anticipated that the Fed was going to raise the fed funds rate by 75 basis points and they began to preemptively push mortgage rates up,” Jacob Channel, senior economist at LendingTree, told us.

Financial markets are still responding to other global factors that can affect the economy, namely China’s COVID lockdown and Russia’s invasion of Ukraine. “​​We have a lot of factors like that that are putting upward pressure on mortgage rates,” Channel says. “The volatility has been through the roof,” Shashank Shekhar, founder and CEO of InstaMortgage, told us. “The market has been adjusting to a new news cycle practically every single day.”

What Can Homebuyers Do About Rising Mortgage Rates?

A higher mortgage rate leads to a higher monthly payment, which can eat into your total buying power. But, experts also point out that these 5.5+% rates we are seeing right now are still considered normal from a historical perspective. It was only a few short years ago when a “good rate” was around 5%. 

Rising mortgage rates also mean the rate you might be quoted one day could be significantly different than one you get the next day. Experts caution against trying to time the market to get the best rate. “If you think you’re going to like the rate, lock it,” Jennifer Beeston, senior vice president of mortgage lending at Guaranteed Rate, told us. “Because it’s probably going to change in 20 minutes.”

Be sure to get quotes from different lenders to ensure you’re getting the best deal, experts say. “The rate highly impacts your monthly affordability for as long as you will hold this home,” Skylar Olsen, principal economist at Tomo, a digital real estate and mortgage company, told us. “It is actually a critical piece of this decision, and that takes shopping around.”

What Can Homebuyers Do About Rising Home Prices?   

When thinking about your mortgage rate, it’s also important to consider what’s happening to housing prices. According to data from Realtor.com, the median U.S. home listing price was $447,000 in May 2022, another all-time high. Experts say the big uptick in prices is due to a mismatch between supply and demand: There are a lot of people trying to buy houses, and there aren’t enough houses to go around. That means you probably shouldn’t wait around and hope for the market to crash. “I don’t think buyers should be betting on any really significant price declines,” Robert Dietz, chief economist at the National Association of Home Builders, told us

What you can do is think beyond just the mortgage rate. Be sure you’re in a good position to buy a house. “The most important thing that any would-be homebuyer should do is take stock of where they are personally,” said Channel. “Do I have enough cash to make my mortgage payments, to put money down on a down payment? Is my credit score good?” Then, be patient and be creative with your home search. Don’t rush for the first houses you see, he says. Look in unexpected places. One possibility is the U.S. Department of Housing and Urban Development’s page of foreclosed homes. “The more you plan and the more diligent you are before you really even start going out house hunting actively, the easier it is to navigate a housing market that is as hot and fast as this one,” Channel says.

It’s more important than ever to shop around for a mortgage when you’re in the market for a house, said Channel. When rates aren’t going up as dramatically as they are now, quotes from different lenders can regularly vary by half a percentage point. With the market moving so quickly, that could be even higher. 

NextAdvisor’s Top 10 Mortgage Lenders. 

 

How Does a 20-Year Mortgage Payment Compare to Other Terms?

Lenders offer lower interest rates for shorter-term loans, but because you’re repaying the loan more quickly, your monthly payments are higher. The table below shows how interest rates and loan terms impact your monthly payment and overall loan cost.

Loan TermLoan BalanceInterest RateMonthly PaymentTotal Interest
10 Years$250,0002.25%$2,328$29,418
15 Years$250,0002.30%$1,643$45,855
20 Years$250,0002.75%$1,355$75,332
30 Years$250,0003%$1,054$129,446

Pros and Cons of a 20-Year Mortgage

Pros

  • Lower interest rate

  • Lower monthly payment compared to a 15-year

  • Payoff timeline is shorter than a 30-year term

Cons

  • Larger monthly payment compared to a 30-year term

  • More overall interest will accrue compared to a 15-year term

What Are Today’s 20-Year Mortgage Rates?

On Tuesday, June 28, 2022 according to Bankrate’s latest survey of the nation’s largest mortgage lenders, the average 20-year mortgage rate is 5.910% with an APR of 5.920%. The average 20-year refinance rate is 5.860% with an APR of 5.870%.

Current 20-Year Mortgage Rates

ProductInterest RateAPR
30-Year Fixed Rate5.850%5.860%
30-Year FHA Rate4.850%5.690%
30-Year VA Rate4.980%5.170%
30-Year Fixed Jumbo Rate5.840%5.850%
20-Year Fixed Rate5.860%5.870%
15-Year Fixed Rate5.110%5.140%
15-Year Fixed Jumbo Rate5.110%5.130%
10-Year Fixed Rate5.170%5.200%
5/1 ARM Rate4.220%5.540%
5/1 ARM Jumbo Rate4.160%5.310%
7/1 ARM Rate5.160%5.080%
7/1 ARM Jumbo Rate5.210%5.030%
10/1 ARM Rate5.260%5.170%
ProductInterest RateAPR
30-Year Fixed Rate5.900%5.910%
30-Year FHA Rate4.820%5.630%
30-Year VA Rate5.020%5.130%
30-Year Fixed Jumbo Rate5.870%5.880%
20-Year Fixed Rate5.910%5.920%
15-Year Fixed Rate5.140%5.170%
15-Year Fixed Jumbo Rate5.160%5.180%
10-Year Fixed Rate5.170%5.200%
5/1 ARM Rate4.300%5.670%
5/1 ARM Jumbo Rate4.240%5.670%
7/1 ARM Rate5.080%5.100%
7/1 ARM Jumbo Rate5.140%5.010%
10/1 ARM Rate5.180%5.150%

Rates as of Tuesday, June 28, 2022

ABOUT THESE RATES

These rate averages are based on weekday mortgage rate information provided by national lenders to Bankrate.com, which like NextAdvisor is owned by Red Ventures. These averages provide borrowers a broad view of average rates that can inform borrowers when comparing lender offers. We feature both the interest rate and the annual percentage rate (APR), which includes additional lender fees, so you can get a better idea of the overall cost of the loan. The actual interest rate you can qualify for may be different from the average rates quoted in our rate table. But these rates are useful for giving you a benchmark to use when comparing loan offers by giving you a sense of how the type of mortgage and the length of the repayment term impacts your interest rate and APR.

Fees to Consider With a 20-Year Mortgage

The repayment term of your mortgage won’t impact the fees you pay on the loan. So a 15-year, 20-year, or 30-year mortgage will have the exact same closing costs, all else equal.

What will affect the fees you pay is the lender you choose. So it’s worth the extra effort to compare offers and find the best mortgage lender.

Closing costs range from 2% to 6% of the loan amount, and lowering those fees by just 1% can save you thousands of dollars. A detailed estimate of your closing costs is included on the Loan Estimate, which the lender is required to provide you within three business days of submitting an application. Once you have a few offers in hand, you can compare fees and select the best deal.

How To Pick the Right Mortgage Loan Term For You

Ultimately, deciding which mortgage term is best for you depends on your personal situation and goals. Can you afford a higher monthly payment? Do you care about building equity in your home faster, or paying off your mortgage sooner? If so, then a 15-year mortgage could be for you. But if you can’t afford a high monthly payment, or if you would be better off spending that money elsewhere, then a 30-year mortgage would likely be a better bet. If you want a compromise between the two options, a 20-year mortgage might be able to provide that.