A few major mortgage rates moved higher today. The average interest rates for both 15-year fixed and 30-year fixed mortgages both trended upward. We also saw an inflation in the average rate of 5/1 adjustable-rate mortgages. Although mortgage rates fluctuate, they are at a historic low. Because of this, right now is a great time for prospective homebuyers to lock in a fixed rate. But as always, make sure to first consider your personal goals and circumstances before purchasing a home, and shop around for a lender who can best meet your needs.
30-year fixed-rate mortgages
The average interest rate for a standard 30-year fixed mortgage is 3.52%, which is a growth of 18 basis points compared to one week ago. (A basis point is equivalent to 0.01%.) Thirty-year fixed mortgages are the most common loan term. A 30-year fixed rate mortgage will usually have a lower monthly payment than a 15-year one — but usually a higher interest rate. You won’t be able to pay off your house as quickly and you’ll pay more interest over time, but a 30-year fixed mortgage is a good option if you’re looking to minimize your monthly payment.
15-year fixed-rate mortgages
The average rate for a 15-year, fixed mortgage is 2.84%, which is an increase of 22 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. However, as long as you’re able to afford the monthly payments, there are several benefits to a 15-year loan. These include typically 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 3.54%, an addition of 19 basis points compared to a week ago. With an ARM mortgage, you’ll typically get a lower interest rate than a 30-year fixed mortgage for the first five years. But changes in the market might cause your interest rate to increase after that time, as detailed in the terms of your loan. For borrowers who plan to sell or refinance their house before the rate changes, an adjustable-rate mortgage may be a good option. If not, shifts in the market could significantly increase your interest rate.
Mortgage rate trends
We use data collected by Bankrate, which is owned by the same parent company as CNET, to track rates changes over time. 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||3.52%||3.34%||+0.18|
|15-year fixed rate||2.84%||2.62%||+0.22|
|30-year jumbo mortgage rate||2.73%||2.75%||-0.02|
|30-year mortgage refinance rate||3.54%||3.35%||+0.19|
Updated on Jan. 12, 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 think about your current finances 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. 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 mortgage rate, factors including closing costs, fees, discount points and taxes might also factor into the cost of your house. Make sure you talk to multiple lenders — including local and national banks, credit unions and online lenders — and comparison shop to find the best mortgage loan for you.
How does the loan term impact my mortgage?
When picking a mortgage, remember to consider the loan term, or payment schedule. The mortgage 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. For fixed-rate mortgages, interest rates are the same for the life of the loan. Unlike a fixed-rate mortgage, the interest rates for an adjustable-rate mortgage are only stable for a certain amount of time (most frequently five, seven or 10 years). After that, the rate fluctuates annually based on the market rate.
When choosing between a fixed-rate and adjustable-rate mortgage, you should consider how long you plan to live in your home. If you plan on living long-term in a new house, fixed-rate mortgages may be the better option. While adjustable-rate mortgages may offer lower interest rates upfront, fixed-rate mortgages are more stable in the long term. If you aren’t planning to keep your new house for more than three to 10 years, though, an adjustable-rate mortgage might give you a better deal. The best loan term is entirely dependent on an individual’s situation and goals, so make sure to consider what’s important to you when choosing a mortgage.