Key mortgage rates remained at their recent highs relative to where they have been in the past few years.
Inflation has pushed mortgage rates up in recent weeks. The Bureau of Labor Statistics reported year-over-year inflation of 7.5% in January, the highest it’s been in 40 years. It could encourage the Federal Reserve to move more quickly and decisively to increase its benchmark short-term interest rate, which might nudge mortgage rates even higher.
Experts say rates are still quite low by historical standards. Homebuyers can still get good deals.
Take a look at today’s rates:
- Mortgage Rate Forecast: Where Are Mortgage Rates Headed in 2022?
- What the Mortgage Rate Forecast Means for Homebuyers
- What to Know About Loans Fees
- Today’s Mortgage Refinance Rates
- 30-Year Mortgage Rates
- 15-Year Fixed-Rate Mortgage Rates
- 5/1 ARM Interest Rates
- How We Determine Mortgage Rates
- Mortgage Rate Frequently Asked Questions (FAQ):
- How to Qualify for the Lowest Mortgage Rate
- Is Now a Good Time to Lock in My Mortgage Rate?
Mortgage Rate Forecast: Where Are Mortgage Rates Headed in 2022?
This year began with mortgage rates jumping up to levels we haven’t seen in nearly two years. Rapid economic recovery has helped push mortgage rates higher, along with high inflation. However, how high mortgage rates climb could be limited by the impact of Omicron or other COVID-19 variants.
As a result of the Federal Reserve reducing its support of the bond market, rates are expected to rise throughout this year, according to the experts.
What the Mortgage Rate Forecast Means for Homebuyers
Despite the dramatic increases, mortgage rates remain at low levels and are considered historically favorable mortgage rates.
Lingering low rates help homebuyers increase their buying power, which can combat rising home values. The problem is, in many cases, interest rates aren’t low enough to offset the high home prices. Along with rising home prices, rising interest rates will also increase the cost of purchasing a home.
What to Know About Loans Fees
If you take out a mortgage, your decision should factor in the loan’s closing costs. There are typically 3 to 6% of the loan amount in closing costs, including origination charges, prepaid interest, and property taxes.. Accepting a higher interest rate, in exchange for lender credits can assist you in reducing your out-of-pocket costs. This strategy can save you money in the short-term, so it’s worth looking into if there is a chance you’ll be selling the home or refinancing in five to eight years.
Today’s Mortgage Refinance Rates
Refinancing became a bit more expensive today as 30-year fixed and 15-year fixed refinance mortgages saw their average rates climb. Shorter term, 10-year fixed-rate refinance mortgages also increased.
Today’s refinance rates are:
Check out mortgage rates that meet your distinct needs.
30-Year Mortgage Rates
The 30-year fixed-mortgage rate average is 3.98%, which is an increase of 21 basis points from seven days ago.
15-Year Fixed-Rate Mortgage Rates
The median rate for a 15-year fixed mortgage is 3.34%, which is an increase of 19 basis points compared to a week ago.
A 15-year, fixed-rate mortgage’s monthly payment is larger and will take up a bigger chunk of your monthly budget than a 30-year mortgage would. However, 15-year loans have some considerable benefits: You’ll save thousands of dollars in interest and pay off your loan much earlier.
5/1 ARM Interest Rates
A 5/1 ARM has an average rate of 2.85%, which is a rise of 1 basis point compared to last week.
An adjustable-rate mortgage is ideal for borrowers who will sell or refinance before the rate changes. If that’s not the case, their interest rates could end up being markedly higher after a rate adjusts.
For the first five years, a 5/1 ARM will typically have a lower interest rate compared to a 30-year fixed mortgage. Keep in mind that your rate could climb higher and your payment might grow by hundreds of dollars a month.
How We Determine Mortgage Rates
To get an idea of where mortgage rate may move, we rely on information collected by Bankrate, which is owned by the same parent company as NextAdvisor. The daily rates survey focuses on mortgages where the borrower has a high credit score (740+), 20% equity or more, and lives in the home.
This table has current average rates based on information provided to Bankrate by lenders from across the country:
Rates accurate as of February 11, 2022.
Mortgage Rate Frequently Asked Questions (FAQ):
How to Qualify for the Lowest Mortgage Rate
There are two key factors to getting the best mortgage rate: Loan-to-value ratio (LTV), and your credit score.
Having a credit score of at least 750 will help you qualify for the lowest rate. But, even a score of over 700 can get you a decent rate reduction compared to a lower credit score. For a credit score over 800, the mortgage rate discount is negligible.
Mortgage providers provide the most substantial mortgage rate discounts to borrowers that are deemed less risky. A hefty down payment is a sign to lenders that you are more committed and are less likely to stop making payments. A down payment of 20% or more will save you money in two ways: with a more favorable mortgage rate, and you’ll be able to avoid paying for private mortgage insurance (PMI).
Is Now a Good Time to Lock in My Mortgage Rate?
Mortgage rates move up and down on a daily basis, and it’s impossible to time the market. So locking in your interest rate right now is a good idea because overall, rates are historically favorable.
When you lock in your rate, ask your lender how long the lock is valid for. A rate lock can be good for anywhere from 30 to 60 days, which typically will give you enough time to close before the lock expires. If something happens where you need to extend your rate lock, ask about fees as many lenders charge a fee for extending a rate lock.