Looking at today’s mortgage rates, the most notable rates have gone up slightly. The incredible rise in 30-year fixed mortgage rates is making headlines, but don’t forget the 15-year fixed rates, which have also gone up. For variable rates, the 5/1 Variable Rate Mortgage (ARM) is also trending higher.
Almost two years have passed with record mortgage rates. Now 2022 has started with rates reaching pre-pandemic levels.
Don’t cancel your home purchase or refinance plans just yet. Even though rates are higher than they were in 2021, they remain historically low. Only a few years ago, 30-year fixed rates were in the top 5%.
Either way, home buying decisions take a lot more into consideration besides the interest rate. Buying a house is making a lifestyle choice. What happens in the interest rate market can influence a decision, it is wise not to base it on just a few basis points of a mortgage rate. Setting and sticking to a realistic home buying budget is far more important than the 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.
Check out today’s rates:
Mortgage Rate Forecast: What’s Driving Mortgage Rate Changes?
Mortgage rates have risen considerably since the beginning of the year. Two of the factors behind the rate hike 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 deal with high inflation — moves that could drive up borrowing costs .
Other trends have led to more uncertainty and volatility in the market. One is Russia’s war in Ukraine, which has had repercussions on global financial markets, including rising gas prices and falling inventories. Another is the looming prospect of a resurgence of COVID-19. While the Omicron variant appears to have generally declined in the United States, the future of the virus is impossible to predict with certainty.
Among the experts, there is almost 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 recent dramatic increases, mortgage rates remain at relatively low levels and are still considered historically favorable.
Historically low interest rates helped offset rising house prices. But the overall cost of home ownership is now rising with rising rates. With a combination of limited supply of homes, prices have risen significantly from pre-pandemic levels. Massive buyer demand and rising home construction costs are also contributing to the surge.
A point or two difference can mean a lot of money on 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 home, and doing it when your personal lifestyle and financial situation indicate it’s the right time. Mortgage lender rates can vary widely. In order to get the best deal, shop around between a few different mortgage lenders.
Why is it important to look at the 30-year fixed mortgage rate history?
Today’s rates are higher than they were in the low rate years of 2020 and 2021, but they’re still not high if you zoom out before that time. Rates were well above 4% in 2018-19. Before 2008, a “good” rate was considered around 5%. This means that the current mortgage interest rates are still very good in the long term despite the crossing of the psychological barrier of 4%.
NextAdvisor typically uses Bankrate survey data. However, this chart above pulls 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 data elsewhere on this page, historical trends generally follow each other. A look back at historic Freddie Mac rates provides a good look at how current rates compare to those of the past two decades.
What to know about loan fees
When you take out a mortgage, you need to know the closing costs. These fees include loan origination fees, prepaid interest and property taxes, and can range from 3-6% of the loan amount. Accepting a higher interest rate, in exchange for credits from the lender, can help you reduce your outgoings. costs. You can save money in the short term by using this strategy, so don’t overlook it if you plan to sell your home or refinance it in five to eight years.
Current Mortgage Refinance Rates
Refinance rates made headlines today. We have seen a remarkable increase in rates for 30-year fixed loans. Interestingly, 15-year fixed rate refinances moved in the opposite direction and declined. Shorter-term 10-year fixed rate refinance mortgages have also seen growth.
The average refinancing 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%, up 33 basis points from last week.
15-year fixed mortgage interest rate
The median rate for a 15-year fixed mortgage is 4.09%, up 26 basis points from seven days ago.
The monthly payment on a 15-year fixed rate mortgage is higher than what you would pay on a 30-year mortgage. However, 15-year loans have significant benefits: you’ll pay thousands less in interest and pay off your loan much sooner.
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 that will sell or refinance before the rate changes. If not, their interest rates could end up being significantly 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 your rate could increase and your payment could increase by hundreds of dollars per month.
How We Determine Mortgage Rates
We use daily mortgage rate data from Bankrate 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 higher. Bankrate is part of the same parent company as NextAdvisor.
Current average rates shown below and based on the Bankrate Mortgage Rate Survey:
Updated March 30, 2022.
Plug and play your desired mortgage interest rate and other estimated numbers into our mortgage calculator to see an estimated monthly payment.
Frequently Asked Questions (FAQ) About Mortgage Rates:
How to benefit from the lowest mortgage rate?
Comparing mortgage offers is one of the best ways to get the lowest mortgage rate.
Your mortgage rate depends on a number of factors that lenders consider when assessing the risk of lending you money to purchase a home. Your credit score is factored into the decision. And even the value of the property versus the size of your mortgage matters. So increasing your down payment can lower your mortgage interest rate.
But banks will view your situation differently. Thus, you can give the same documentation to three different lenders and receive mortgage offers with very different rates and fees.
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 since interest rates are relatively low right now, you should lock in your rate as soon as possible.
When you lock in your rate, ask your lender how long the lock is valid. A rate lock can be valid for 30 to 60 days, which usually gives 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.