A few important mortgage rates saw an increase today. The average interest rates for both 15-year fixed and 30-year fixed mortgages both grew. At the same time, average rates for 5/1 adjustable-rate mortgages also increased.
Mortgage rates have been slowly rising since the start of this year, and are expected to increase throughout 2022. Rates are now closer to 2018 levels than the historic lows seen during the height of the pandemic. Interest rates are dynamic — they rise and fall on a daily basis depending on economic factors. In general, now is a good time for prospective homebuyers to lock in a lower rate rather than later this year. Speaking with multiple lenders will help you find the best rate available for your financial situation.
30-year fixed-rate mortgages
For a 30-year, fixed-rate mortgage, the average rate you’ll pay is 5.41%, which is an increase of 12 basis points from one week ago. (A basis point is equivalent to 0.01%.) The most frequently used loan term is a 30-year fixed mortgage. 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. 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 4.65%, which is an increase of 17 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 larger monthly payment. However, as long as you can afford the monthly payments, there are several benefits to a 15-year loan. You’ll usually 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 5.39%, a climb of 16 basis points compared to a week ago. You’ll typically get a lower interest rate (compared to a 30-year fixed mortgage) with a 5/1 adjustable-rate mortgage in the first five years of the mortgage. However, shifts in the market could 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 may significantly increase your interest rate.
Mortgage rate trends
Though 2022 began with low mortgage rates, there has been an increase in recent months, and rates are expected to continue going up throughout 2022. Home loan rates are influenced by various economic factors. A major one is government policy set by the Federal Reserve, which raised rates in March for the first time since 2018 in response to record-high inflation. The Fed anticipates raising interest rates six more times this year, so if you’re looking to buy a house in 2022, you should be prepared for interest rates to keep increasing.
We use rates collected by Bankrate, which is owned by the same parent company as CNET, to track changes in these daily rates. This table summarizes the average rates offered by lenders across the US:
Current average mortgage interest rates
|Loan type||Interest rate||A week ago||Change|
|30-year fixed rate||5.41%||5.29%||+0.12|
|15-year fixed rate||4.65%||4.48%||+0.17|
|30-year jumbo mortgage rate||3.67%||3.64%||+0.03|
|30-year mortgage refinance rate||5.42%||5.26%||+0.16|
Updated on May 2, 2022.
How to shop for the best mortgage rate
When you are ready to apply for a loan, you can connect with a local mortgage broker or search online. Make sure to take into account your current financial situation and your goals when searching for a mortgage. A range of factors — including your down payment, credit score, loan-to-value ratio and debt-to-income ratio — will all affect your mortgage interest rate. 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, other factors including closing costs, fees, discount points and taxes might also affect the cost of your home. Be sure to shop around with multiple lenders — such as credit unions and online lenders in addition to local and national banks — in order to get a loan that’s best for you.
How does the loan term impact my mortgage?
One important factor to consider when choosing a mortgage is the loan term, or payment schedule. The most common mortgage terms are 15 years and 30 years, although 10-, 20- and 40-year mortgages also exist. Mortgages are further divided into fixed-rate and adjustable-rate mortgages. The interest rates in a fixed-rate mortgage are fixed for the duration 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 changes annually based on the market interest rate.
When choosing between a fixed-rate and adjustable-rate mortgage, you should think about the length of time you plan to stay in your house. If you plan on living long-term in a new house, fixed-rate mortgages may be the better option. While adjustable-rate mortgages can sometimes offer lower interest rates upfront, fixed-rate mortgages are more stable over time. However you may get a better deal with an adjustable-rate mortgage if you only intend to keep your home for a few 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.