Mortgage rates have already increased in 2022, but it’s unlikely that they’ll continue to spike at this rapid pace.
“It still looks unlikely that rates will hit 4% this year, but it’s within the realm of possibility as we are now squarely in the 3%+ range on 30-year fixed conventional mortgages,” Robert Heck, vice president of mortgage at Morty, told Insider. “While many economic indicators are strong and suggest continued market health over the coming year, factors like inflation, increasing rates, continued price growth, and the potential for unforeseen uncertainty could combine to slow things down.”
If you’re ready to shop for homes, you may want to lock in a rate soon before rates inch even higher. However, don’t rush if you aren’t financially prepared — rates shouldn’t skyrocket over the next few weeks or months.
Mortgage rates today
Mortgage refinance rates today
Use our free mortgage calculator to see how today’s interest rates will affect your monthly payments.
Your estimated monthly payment
- Paying a 25% higher down payment would save you $8,916.08 on interest charges
- Lowering the interest rate by 1% would save you $51,562.03
- Paying an additional $500 each month would reduce the loan length by 146 months
By clicking on “More details,” you’ll also see how much you’ll pay over the entire length of your mortgage, including how much goes toward the principal vs. interest.
Will mortgage rates go up in 2022?
has been aggressively buying assets, including mortgage-backed securities, to help the US economy during the COVID-19 pandemic. This has been one factor keeping mortgage rates low.
In early November, the Fed announced that it will begin tapering asset purchasing. Then it said in December that it will be tapering purchasing at twice the speed than it originally predicted, and it plans to increase the federal funds rate three times in 2022.
Average mortgage rates have ticked up recently, and the Fed’s announcements indicate that mortgage rates will probably continue to gradually increase in 2022. You may want to lock in a low mortgage rate if you’re worried about rates going up this year.
It still looks unlikely that rates will hit 4% this year, but it’s within the realm of possibility as we are now squarely in the 3%+ range on 30-year fixed conventional mortgages.Robert Heck, vice president of mortgage at Morty
What is a fixed-rate mortgage vs. adjustable-rate mortgage?
In the past few weeks, fixed mortgage rates have been inching upward as adjustable rates drop. An adjustable-rate mortgage (ARM) could be a good deal depending on your situation.
Fixed-rate mortgages lock in your rate for the entire life of your loan. Adjustable-rate mortgages lock in your rate for the first few years, then your rate goes up or down periodically.
Because adjustable rates are starting low, they are worthwhile options if you plan on selling your home before the interest rate changes. For instance, if you get a 7/1 ARM and want to move before seven years, you won’t risk paying a higher rate later.
But if you want to buy a forever home, a fixed rate could still be a better fit. Fixed rates are relatively low, and you won’t chance your rate increasing in a few years.