Looking at today’s mortgage rates a number of significant rates went higher. The averages for both 30-year fixed and 15-year fixed mortgages both made gains. The most common type of variable-rate mortgage is the 5/1 adjustable-rate mortgage (ARM) also ticked up.
Take a look at today’s rates:
- Where Are Mortgage Rates Headed This Year?
- What the Mortgage Rate Forecast Means for You
- Pay Attention to Loan Fees
- Current Mortgage Refinance Rates
- 30-Year Mortgage Rates
- 15-Year Mortgage Interest Rates
- 5/1 ARM Rates
- How Our Mortgage Interest Rates Are Calculated
- Mortgage Rate Frequently Asked Questions (FAQ):
- How to Qualify for the Lowest Mortgage Rate
- Should I Lock in My Mortgage Rate Now?
Where Are Mortgage Rates Headed This Year?
Mortgage rates dramatically increased in recent weeks. Inflation and a growing economy are two reasons why rates have risen. Nevertheless, new Coronavirus variants such as Omicron have injected uncertainty into the markets. For 2022, the forecast is for rates to grow, and the Federal Reserve actions to address inflation could help fuel that increase.
What the Mortgage Rate Forecast Means for You
The current trends in mortgage rates shouldn’t derail your plans to buy a home, as long as it makes sense for you at the time. However, higher mortgage rates will drive up the cost of a home purchase and will impact how much house you can afford.
It is predicted that the 2022 housing market will be just a little bit more reasonable. But it is anticipated to still be a strong sellers market, however buyers could face less competition. Experts predict that home prices will continue to rise in 2022, but at a slower pace than in the past year. And the expectation is that rates will continue to be historically low.
Pay Attention to Loan Fees
When you take out a home loan, 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.. One way to reduce your out of pocket costs, if to accept a higher interest rate in exchange for lender credits. There is a possibility that you will be selling your home or refinancing in five to eight years, so this strategy could save you money in the short-term.
Current Mortgage Refinance Rates
Refinancing became a bit more expensive today as 30-year fixed and 15-year fixed refinance mortgages saw their average rates go up. Shorter term, 10-year fixed-rate refinance mortgages also made gains.
The refinance averages for 30-year, 15-year, and 10-year loans are:
Current Mortgage Rates.
30-Year Mortgage Rates
The 30-year fixed-mortgage rate average is 3.73%, which is an increase of 14 basis points from seven days ago.
15-Year Mortgage Interest Rates
The median rate for a 15-year fixed mortgage is 3.09%, which is an increase of 17 basis points from the same time last week.
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 faster.
5/1 ARM Rates
A 5/1 ARM has an average rate of 2.80%, which is an uptick of 4 basis points compared to last week.
An adjustable-rate mortgage is ideal for individuals who will refinance or sell before the rate changes. If that’s not the case, their interest rates could end up being noticeably 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 depending on how much your loan’s rate adjusts, your payment has the potential to increase by a large amount.
How Our Mortgage Interest Rates Are Calculated
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 740+ FICO score, 20% equity or more, and the home is occupied by the owner.
The average rates listed below and based on the Bankrate mortgage rate survey:
Updated on January 27, 2022.
Mortgage Rate Frequently Asked Questions (FAQ):
How to Qualify for the Lowest Mortgage Rate
Comparing mortgage offers is a great way to qualify for the lowest mortgage interest rate.
The mortgage rate you’ll qualify for depends on a number of factors lenders consider when assessing how likely you are to repay your mortgage. Your credit score factors into the decision. And even the property’s value compared to your mortgage balance is important. So putting more money into your down payment can reduce your interest rate.
But lenders will consider your circumstances differently. So you can give the same documentation to three different banks, and receive mortgage offers with vastly different rates and fees.
Should I Lock in My Mortgage Rate Now?
It’s impossible to know what direction mortgage rates will go from day to day. That’s why a mortgage rate lock is such a useful tool because it protects you if rates go up. And with interest rates being relatively low right now, you should lock in your rate as soon as you can.
A rate lock will only last for a set amount of time, typically 30-60 days. If you hit a snag during closing and it looks like your rate lock will expire you should contact your lender. It may be able to extend the rate lock, however, you might have to pay a fee for that privilege.