Looking at today’s mortgage rates a variety of notable rates climbed. The averages for both 30-year fixed and 15-year fixed mortgages both were driven higher. For variable rates, the 5/1 adjustable-rate mortgage (ARM) also ticked up.
The averages for 30-year fixed, 15-year fixed, and 5/1 ARMs are:
- The average 30-year fixed-rate mortgage currently sits at 3.50%
- 20-year mortgage rate: 3.40%
- The average 15-year fixed-rate mortgage currently sits at 2.82%
- 10-year fixed mortgage rates are averaging 2.79%
- 5/1 ARM rate: 2.74%
Mortgage Rate Forecast: Where Are Mortgage Rates Headed in 2022?
This year started off with record low mortgage rates and we’ve seen rates climb since then. However, this rate growth has come in fits and spurts due to competing factors pushing and pulling on rates. A healthy economy and soaring inflation have helped to push rates up. Nevertheless, new Coronavirus variants such as Omicron have injected uncertainty into the markets and dampened interest rates somewhat. It is believed that mortgage rates will climb in 2022, and the decision by the Federal Reserve to reduce its bond purchases will contribute to that.7
What Do the Current Mortgage Rate Trends Mean for Homebuyers?
Even with a steady increase in mortgage interest rates, homebuyers will still have access to historically low rates for the foreseeable future. As a result, homebuyers can expect their interest rates to increase only moderately. With so many factors that go into buying a home, mortgage rates shouldn’t have a significant impact for most homebuyers.
In 2022, the housing market is expected to moderate slightly, which is good for homebuyers. But it is anticipated to still be a strong sellers market, however buyers could face less competition. In general, experts believe home prices will continue to go up in 2022, but at a slower pace. And the expectation is that rates will continue to be historically low.
Pay Attention to Loan Fees
If you take out a home loan, you’ll want to be aware of the closing costs. The closing costs can be anywhere from 3-6% of the loan amount, including origination fees, prepaid interest, and property taxes.. It is possible to reduce your out of pocket costs by accepting a higher interest rate in exchange for lender credits. This strategy can save you money in the short-term, so it’s worth looking into if there is a chance you’ll be selling the home or refinancing in five to eight years.
Current Mortgage Refinance Rates
Refinancing became a bit more expensive today as 30-year fixed and 15-year fixed refinance mortgages saw their mean rates go up. Shorter term, 10-year fixed-rate refinance mortgages also made gains.
Today’s refinance rates are:
- The average 30-year fixed-rate refinance currently sits at: 3.50%
- 20-year refinance rate: 3.44%
- 15-year refinance rate: 2.80%
- 10-year refinance rate: 2.82%
30-Year Fixed Mortgage Interest Rates
The average 30-year fixed mortgage interest rate is 3.50%, which is a growth of 15 basis points from last week.
15-Year Fixed-Rate Mortgage Rates
The median rate for a 15-year fixed mortgage is 2.82%, which is an increase of 20 basis points compared to a week ago.
A 15-year, fixed-rate mortgage’s monthly payment will be much bigger. So finding room in your budget for a 30-year loan’s monthly payment would be less difficult. But, 15-year loans have some considerable benefits: You’ll save thousands of dollars in interest and pay off your loan much faster.
5/1 Adjustable-Rate Mortgage Rates
A 5/1 ARM has an average rate of 2.74%, which is a rise of 1 basis point from the same time last week.
An ARM is ideal for households who will refinance or sell before the rate changes. If that’s not the case, their interest rates could end up being remarkably higher after a rate adjusts.
For the first five years, a 5/1 ARM will typically have a lower interest rate compared to a 30-year fixed mortgage. Keep in mind that your rate could climb higher and your payment might grow by hundreds of dollars a month.
How We Determine Mortgage Interest Rates
NextAdvisor’s mortgage interest rate averages are pulled from Bankrate’s daily rate data.. These overnight rates are based on a specific personal financial profile, which only includes loans for primary residences where the borrower has a FICO score of 740+. Bankrate is part of the same parent company as NextAdvisor.
This table has current average rates based on information provided to Bankrate by lenders from across the nation:
|Loan type||Interest rate||A week ago||Change|
|30-year fixed rate||3.50%||3.35%||+0.15|
|15-year fixed rate||2.82%||2.62%||+0.20|
|30-year jumbo mortgage rate||3.51%||3.36%||+0.15|
|30-year mortgage refinance rate||3.50%||3.35%||+0.15|
Updated on January 13, 2022.
Mortgage Rate Frequently Asked Questions (FAQ):
How to Get the Best Mortgage Rate
Your credit score, and loan-to-value ratio (LTV), and are the most important factors in determining your interest rate.
Having a credit score of at least 750 will help you qualify for the lowest rate. But, even a score of 700+ can get you a decent rate reduction compared to a lower credit score. However, once you get a credit score higher than 800, the interest rate discount is negligible.
Banks offer the biggest mortgage rate discounts to home buyers that are deemed less risky. One surefire way to show you’re a less risky borrower is to bring a bigger down payment to the closing table. A down payment of 20% or more will save you money in two ways: with a more favorable mortgage rate, and you’ll be able to avoid paying for private mortgage insurance (PMI).
When Should I Lock in My Mortgage Rate?
Mortgage rates move up and down on a daily basis, and it’s impossible to time the market. So locking in your interest rate right now is a good idea because overall, rates are exceptionally low.
When you lock in your rate, ask your lender how long the lock is valid for. A rate lock can be good for anywhere from 30 to 60 days, which typically will give you enough time to close before the lock expires. If you want to extend the rate lock, ask about fees as many lenders charge a fee for extending a rate lock.