What we are seeing today is that a handful of major mortgage rates have trended lower. Average 30-year fixed mortgage rates declined, while average 15-year fixed mortgage rates increased slightly. At the same time, average 5/1 variable rate mortgage (ARM) rates have fallen.
The averages of the 30-year fixed, 15-year fixed and 5/1 MRAs are:
Where are mortgage rates going in 2022?
The dramatic rise in mortgage rates has been the trend so far this year. A rapid economic recovery pushed mortgage rates up. Inflation also played a role, reaching 7% last year, its highest level in almost 40 years. We can see rates fluctuate if Omicron or other COVID-19 variants negatively affect the economy or public health.
The Federal Reserve is expected to raise short-term interest rates in 2022 and has already begun to scale back its purchases of mortgage-backed securities. These two policy changes are likely to help rates rise this year, which is what most experts predict.
What do current mortgage rate trends mean for homebuyers?
Despite this, mortgage interest rates are still abnormally low, in terms of historical mortgage rates.
In the face of rising home values, low interest rates can help buyers increase their purchasing power. The housing market is cooling, but high home values may overshadow the savings possible with a low mortgage rate. Rate increases may require buyers to adjust their budget to account for increased costs.
Closing costs and loan costs
Whenever you take out a mortgage, your decision should factor in loan closing costs. Closing costs can be anywhere from 3-6% of the loan amount, including origination fees, prepaid interest, and property taxes. . You may sell your home or refinance your home in five to eight years. This strategy could therefore save you money in the short term.
Looking at today’s mortgage refinance rates
Checking refinance mortgage rates, today the average rate for a 30-year fixed refinance has fallen, while the average 15-year fixed rate
The refinancing averages for 30-year, 15-year and 10-year loans are:
Compare nationwide home loan rates from various lenders.
30-year mortgage rates
The average 30-year fixed mortgage rate is 4.21%, down 4 basis points from last week.
15-year mortgage interest rate
The median rate for a 15-year fixed mortgage is 3.50%, up 3 basis points from seven days ago.
The monthly payment on a 15-year fixed rate mortgage is, undeniably, a much higher monthly payment than what you would get on a 30-year mortgage offering the same interest rate. However, 15-year loans have significant advantages: you’ll save thousands of dollars in interest and pay off your loan much sooner.
5/1 ARM Mortgage Rates
A 5/1 ARM has an average rate of 2.92%, down 1 basis point 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 your payment could end up being several hundred dollars higher after a rate adjustment, depending on the terms of your loan.
How we calculate our mortgage rates
NextAdvisor average rates are taken from Bankrate daily rate data. These overnight rates are based on a specific personal financial profile, which only includes loans for primary residences where the borrower has a FICO score of 740+. Bankrate is part of the same parent company as NextAdvisor.
Average rates given below and based on the Bankrate Mortgage Rate Survey:
Updated March 4, 2022.
Use our mortgage calculator to see how your monthly mortgage payment changes based on considerations such as your interest rate, home insurance, and property taxes.
Frequently Asked Questions (FAQ) About Mortgage Rates:
How to get the lowest mortgage rate
To qualify for the absolute best interest rate, you need to focus on two main considerations: credit score and loan-to-value (LTV) ratio.
To get the best interest rate, you’ll need a credit score between 700 and 800. Having a credit score above 800 is nice, but probably won’t have a major impact on your rate.
Banks are offering the biggest mortgage rate cuts to buyers of homes deemed less risky. A surefire way to signal that you’re a less risky borrower is to put down a bigger down payment. A down payment of 20% or more will save you money in two ways: with a lower mortgage rate, and you can avoid paying for private mortgage insurance (PMI).
Should I 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 will last. 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.