A number of closely watched mortgage rates all climbed today. Both 30-year and 15-year fixed mortgage rates have increased. At the same time, average rates for 5/1 variable rate mortgages (ARMs) were also raised.
The averages of the 30-year fixed, 15-year fixed and 5/1 MRAs are:
Where are mortgage rates going in 2022?
This year started with record mortgage rates and we have seen rates climb ever since. Despite this, the rate growth has been uneven due to competing factors that have caused and hindered its growth. Rates rose, in part, due to a healthy economy and rising inflation. Additionally, the threat of Omicron and other variants dampened the rise in mortgage rates. Among the experts, there is almost a consensus that mortgage rates will go up; the actions of the Federal Reserve to fight against inflation can contribute to this process7.
What the mortgage rate forecast means for you
Although most experts predict that mortgage rates will continue to rise, growth will likely be modest. Typically, homebuyers will see an increase in their loan interest rate of only a small amount. With so many factors going into buying a home, mortgage rates shouldn’t have a significant impact for most buyers.
The good news for homebuyers is that the housing market is expected to moderate slightly in 2022. Even with a slight slowdown in the housing market, it will still strongly favor sellers. Experts predict that house prices will continue to rise in 2022, but at a slower pace than last year. And rates are expected to continue at historic lows.
What to know about loan fees
The industry term for the upfront fee you pay when you get a home loan is closing costs. Appraisal fees, title insurance and any lender origination fees are all part of your closing costs. Some closing costs vary by loan size, but overall you can pay 3% to 6% of the total loan balance. Tracking your closing costs is essential because a higher closing cost will result in a higher APR.
Looking at today’s mortgage refinance rates
Refinancing has become a little more expensive today as 30-year and 15-year fixed refinance mortgages have seen their average rates climb. Shorter-term, 10-year fixed-rate refinance mortgages also increased.
The refinancing averages for 30-year, 15-year and 10-year loans are:
Current mortgage rates.
30-Year Fixed-Rate Mortgage Rates
The average 30-year fixed mortgage interest rate is 3.67%, up 16 basis points from the previous week.
15-year fixed mortgage interest rate
The median rate for a 15-year fixed mortgage is 3.02%, up 19 basis points from the same time last week.
The monthly payment for a 15-year fixed rate mortgage is larger and will take up more of your monthly budget than a 30-year mortgage. But 15-year loans have huge advantages: you’ll pay thousands less in interest and pay off your loan much sooner.
5/1 Adjustable Rate Mortgage Rates
A 5/1 ARM has an average rate of 2.78%, an addition of 3 basis points from a week ago.
An ARM is ideal for households that will sell or refinance before the rate changes. If not, their interest rates could end up being remarkably higher after a rate adjustment.
For the first five years, a 5/1 ARM will typically have a lower interest rate than a 30-year fixed mortgage. Keep in mind that depending on your loan rate adjustment, your payment may increase significantly.
How we calculate our mortgage interest rates
NextAdvisor mortgage interest rate averages are taken from Bankrate daily rate data. Bankrate is part of the same parent company as NextAdvisor.
This table shows current average rates based on information provided to Bankrate by lenders nationwide:
Rates as of January 21, 2022.
Pro tip
Use our mortgage calculator to see how your monthly mortgage payment changes based on things like your interest rate, down payment and home insurance.
Frequently Asked Questions (FAQ) About Mortgage Rates:
How to get the lowest mortgage rate
Comparing home loan offers is a great way to get the lowest rate.
The mortgage rate you’ll qualify for depends on a number of factors that lenders take into account when assessing the likelihood of you paying off your home loan. Your credit score is factored into the decision. And your loan-to-value (LTV) ratio is also important, so having a larger down payment is better for your interest rate.
But banks will see your situation differently. So you can provide the same documentation to three different lenders and find that none of the mortgage rates and fees you are offered are the same.
Is it a good idea to lock in my mortgage rate now?
It is impossible to know which direction mortgage rates will go from one day to the next. That’s why a mortgage rate lock is such a useful tool, because it protects you if rates go up. And with interest rates so low right now, you should lock in your rate as soon as possible.
When you lock your rate, ask your lender how long the lock is valid. A rate lock can be good for 30-60 days, which will usually give you plenty of time to close before the lock expires. If you want to extend the rate lock, find out about fees, as many lenders charge a fee to extend a rate lock.
