Looking at today’s mortgage rates the most notable rates inched up. The amazing gain in 30-year fixed mortgage rates is making headlines, but don’t forget about fixed 15-year rates, which saw an increase as well. For variable rates, the 5/1 adjustable-rate mortgage (ARM) also trended upward.
Nearly two years have gone by with record-low mortgage rates. Now, 2022 has started off with rates rising to prepandemic levels.
Don’t cancel your home purchase or refinance plans just yet. Even though rates are higher than they were in 2021 they are still low from a historical perspective. It was only a few short years ago where the 30-year fixed rates were in the high 5%’s.
Homebuying decisions take a lot more consideration outside of the interest rate anyway. Buying a home is about making a lifestyle choice. What’s going on in the interest rate market can influence a decision, it’s wise to not base it solely on a few basis points on a mortgage rate. Setting and sticking to a realistic homebuying budget is way more important than what rate you get.
Let’s take a look at current mortgage rates, where rates have been in the past, and what it all means for the borrower.
Take a look at today’s rates:
Mortgage Rate Forecast: What Is Driving Mortgage Rate Change?
Mortgage rates have risen significantly since the start of the year. Two of the factors causing rates to increase are high inflation – the highest in 40 years – and an economy recovering from the pandemic. The Federal Reserve is expected to spend much of the year raising its benchmark short-term interest rate and making other changes to address high inflation – moves that could drive up the costs of borrowing.
Other trends have led to more uncertainty and volatility in the market. One is Russia’s war in Ukraine, which has caused ripple effects in world financial markets including higher gas prices and tumbling stocks. Another is the looming prospect of a resurgent COVID-19. While the Omicron variant appears to have generally tapered off in the United States, the future of the virus is impossible to predict with any certainty.
Among experts, there is nearly a consensus that mortgage rates will rise throughout 2022. In the short term, anticipate a lot of volatility.
Are Current Mortgage Rates Good For Buying a Home Right Now?
Even with the recent dramatic increases, mortgage rates remain at relatively low levels and are still considered historically favorable.
Low interest rates of the past were helping offset rising home prices. But the overall cost of homeownership is now rising with rising rates. With a combination of limited supply of homes, prices are up significantly from before the pandemic. The massive demand from buyers and higher costs to build homes is also contributing to the surge.
The difference of a point or so can mean a lot of money over a 30-year mortgage. But experts advise against trying to time the market to get the best mortgage rate. It’s more important to focus on finding the right house, and do it when your personal lifestyle and financial situation indicate it’s the right time. Mortgage lenders’ rates can vary significantly. In order to get the best deal, shop around between a few different mortgage lenders.
Why Is It Important to Look at the History of the 30-Year Fixed Mortgage Rate?
Today’s rates are higher than they were in the low-rate years of 2020 and 2021, but they still aren’t high if you zoom out prior to that timeframe. Rates were well above 4% in 2018-2019. Before 2008 a “good” rate was considered around 5%. What this means is current mortgage interest rates are still very good from a long-term view despite breaking through the psychological barrier of 4%.
NextAdvisor generally uses Bankrate survey data. However, this chart above is pulling data from the Freddie Mac survey. Freddie Mac is a government-sponsored entity that collects mortgage data. The rates in this chart differ slightly from the data elsewhere on this page, the historical trends generally track with each other. Looking back at Freddie Mac historical rates offers a good snapshot into how today’s rates compare with the past two decades.
What to Know About Loans Fees
When you take out a mortgage, you’ll want to be aware of the closing costs. These fees include loan origination fees, prepaid interest, and property taxes, and can range from 3 to 6% of the loan amount.. Accepting a higher interest rate, in exchange for lender credits can assist you in reducing your out-of-pocket costs. You can save money in the short term by using this strategy, so don’t overlook it if you plan on selling your house or refinancing in five to eight years.
Current Mortgage Refinance Rates
Refinance rates grabbed headlines today. We saw a remarkable increase in rates for 30-year fixed loans. Interestingly, 15-year fixed-rate refinances moved in the opposite direction and went down. Shorter term, 10-year fixed-rate refinance mortgages also saw growth.
The average refinance rates are as follows:
Current Mortgage Rates.
30-Year Fixed Mortgage Rates
For a 30-year fixed-rate mortgage, the average rate you’ll pay is 4.86%, which is a growth of 33 basis points from last week.
15-Year Fixed Mortgage Interest Rates
The median rate for a 15-year fixed mortgage is 4.09%, which is an increase of 26 basis points from seven days ago.
A 15-year, fixed-rate mortgage’s monthly payment is larger than what you would pay with a 30-year mortgage. However, 15-year loans have some considerable benefits: You’ll pay thousands less in interest and pay off your loan much earlier.
5/1 ARM Mortgage Rates
A 5/1 ARM has an average rate of 3.27%, which is an addition of 12 basis points from seven days ago.
An adjustable-rate mortgage is ideal for households who will sell or refinance before the rate changes. If that’s not the case, their interest rates could end up being significantly 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 Rates
We use Bankrate’s daily mortgage rate data for our mortgage rate trends. These overnight rates are based on a specific borrower profile, which only includes loans for single-family homes with a loan-to-value ratio of 80% or better. Bankrate is part of the same parent company as NextAdvisor.
The current average rates listed below and based on the Bankrate mortgage rate survey:
Updated on March 30, 2022.
Pro Tip
Plug and play your desired mortgage interest rate and other estimated figures into our mortgage calculator to see an estimated monthly payment.
Mortgage Rate Frequently Asked Questions (FAQ):
How Do I Qualify for the Lowest Mortgage Rate?
Comparing home loan offers is one of the best ways to secure the lowest mortgage rate.
Your mortgage rate depends on a number of factors lenders consider when assessing how risky it is to loan you money for a home purchase. Your credit score factors into the decision. And even the property’s value compared to the size of your mortgage is important. So increasing your down payment can reduce your mortgage interest rate.
But banks will consider your circumstances differently. So you can give the same documentation to three different lenders, and receive mortgage offers with vastly different rates and fees.
Is It a Good Idea to Lock in My Mortgage Rate Right Now?
It’s impossible to know what direction mortgage rates will go from day to day. That’s why a mortgage rate lock is such a useful tool because it protects you if rates go up. And with interest rates being relatively low right now, you should lock in your rate as soon as you can.
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.
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