A number of mortgage rates surged today to the highest they’ve been since early 2020, including 15-year fixed and 30-year fixed mortgage rates. We also saw a significant rise in the average rate of 5/1 adjustable-rate mortgages. Mortgage rates have been quite low over the last period, making it a good time for prospective homebuyers to lock in a fixed rate. But rates are dynamic and are projected to continue to rise. Before you buy a house, remember to consider your personal needs and financial situation, and speak with multiple lenders to find the best one for you.
30-year fixed-rate mortgages
The 30-year fixed-mortgage rate average is 3.49%, which is an increase of 19 basis points compared to 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 often have a greater 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 2.76%, which is an increase of 19 basis points from the same time last week. You’ll definitely have a larger monthly payment with a 15-year fixed mortgage compared to a 30-year fixed mortgage, even if the interest rate and loan amount are the same. However, as long as you’re able to afford the monthly payments, there are several benefits to a 15-year loan. 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 3.51%, an uptick of 20 basis points from the same time last week. With an adjustable-rate mortgage mortgage, you’ll usually get a lower interest rate than a 30-year fixed mortgage for the first five years. But since the rate adjusts with the market rate, you could end up paying more after that time, as described in the terms of your loan. Because of this, an ARM might be a good option if you plan to sell or refinance your house before the rate changes. But if that’s not the case, you may be on the hook for a significantly higher interest rate if the market rates change.
Mortgage rate trends
While 2022 kicked off with low mortgage rates, they have seen an uptick recently. There are two major factors at play here: increasing inflation rates and a growing economy. That said, rates can always rise and fall for a variety of reasons. The spread of omicron, for instance, kept rates relatively low throughout December and the start of the new year. Overall, rates are expected to go up in 2022, particularly with theto reduce its bond purchases.
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 nationwide:
Current average mortgage interest rates
|Loan type||Interest rate||A week ago||Change|
|30-year fixed rate||3.49%||3.30%||+0.19|
|15-year fixed rate||2.76%||2.57%||+0.19|
|30-year jumbo mortgage rate||2.74%||2.74%||N/C|
|30-year mortgage refinance rate||3.50%||3.30%||+0.20|
Updated on Jan. 11, 2022.
How to find personalized mortgage rates
To find a personalized mortgage rate, speak to your local mortgage broker or use an online mortgage service. Make sure to think about your current finances and your goals when searching for a mortgage. Specific mortgage interest rates will vary based on factors including credit score, down payment, debt-to-income ratio and loan-to-value ratio. Generally, you want a good credit score, a larger down payment, a lower DTI and a lower LTV to get a lower interest rate. The interest rate isn’t the only factor that affects the cost of your home — be sure to also consider other factors such as fees, closing costs, taxes and discount points. Be sure to talk to several different lenders — for example, 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?
One important thing 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 the same for the duration of the loan. For adjustable-rate mortgages, interest rates are fixed for a certain number of years (usually five, seven or 10 years), then the rate adjusts annually based on the market rate.
One important factor to take into consideration when deciding between a fixed-rate and adjustable-rate mortgage is the length of time you plan on living in your home. Fixed-rate mortgages might be a better fit for people who plan on staying in a home for a while. 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 have plans to keep your house for a couple years. The best loan term is entirely dependent on an individual’s situation and goals, so be sure to take into consideration what’s important to you when choosing a mortgage.