A handful of principal mortgage rates increased today. Both 15-year fixed and 30-year fixed mortgage rates inched upward. The average rate of the most common type of variable-rate mortgage, the 5/1 adjustable-rate mortgage, also floated higher.
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 5.57%, which is a growth of 7 basis points as seven days 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 typically have a higher 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 4.81%, which is an increase of 10 basis points compared to a week ago. You’ll definitely have a bigger 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. But a 15-year loan will usually be the better deal, if you can afford the monthly payments. 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 adjustable-rate mortgage has an average rate of 5.55%, an addition of 7 basis points from seven days ago. For the first five years, you’ll typically get a lower interest rate with a 5/1 adjustable-rate mortgage compared to a 30-year fixed mortgage. But since the rate shifts with the market rate, you might end up paying more after that time, as described in the terms of your loan. If you plan to sell or refinance your house before the rate changes, an adjustable-rate mortgage might make sense for you. But if that’s not the case, you may be on the hook for a significantly higher interest rate if the market rates shift.
Mortgage rate trends
Although 2022 started with low mortgage rates, there has been a steady rise in recent months, and rates are expected to continue going up throughout 2022. Home loan rates are influenced by multiple 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 moving up.
We use data 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:
Today’s mortgage interest rates
|Loan term||Today’s Rate||Last week||Change|
|30-year mortgage rate||5.57%||5.50%||+0.07|
|15-year fixed rate||4.81%||4.71%||+0.10|
|30-year jumbo mortgage rate||3.83%||3.77%||+0.06|
|30-year mortgage refinance rate||5.53%||5.44%||+0.09|
Rates accurate as of May. 11, 2022.
How to find personalized mortgage rates
To find a personalized mortgage rate, talk to your local mortgage broker or use an online mortgage service. When shopping around for home mortgage rates, take into account your goals and current financial situation. Things that affect what the interest rate you might get on your mortgage include: your credit score, down payment, loan-to-value ratio and your debt-to-income ratio. Generally, you want a higher credit score, a larger down payment, a lower DTI and a lower LTV to get a lower interest rate. Apart from the mortgage rate, other factors including closing costs, fees, discount points and taxes might also affect the cost of your home. You should comparison shop with multiple lenders — for example, credit unions and online lenders in addition to local and national banks — in order to get a loan that’s right for you.
How does the loan term impact my mortgage?
One important thing to consider when choosing a mortgage is the loan term, or payment schedule. The most common loan 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 stable for the duration of the loan. Unlike a fixed-rate mortgage, the interest rates for an adjustable-rate mortgage are only fixed for a certain amount of time (typically 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 take into consideration the length of time you plan to stay in your home. For people who plan on staying long-term in a new house, fixed-rate mortgages may be the better option. Fixed-rate mortgages offer more stability over time in comparison to adjustable-rate mortgages, but adjustable-rate mortgages can sometimes offer lower interest rates upfront. If you don’t plan to keep your new house for more than three to 10 years, however, an adjustable-rate mortgage could give you a better deal. There is no best loan term as a rule of thumb; it all depends on your goals and your current financial situation. It’s important to do your research and understand what’s most important to you when choosing a mortgage.