Current Mortgage Interest Rates, January 5, 2022 | Rates Trending Upward

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A handful of principal mortgage rates all crept higher today. Both 30-year fixed and 15-year fixed mortgage rates inched up. For variable rates, the 5/1 adjustable-rate mortgage (ARM) also rose.

Mortgage rates currently are:

Mortgage Rate Forecast

Rates have increased slowly over 2021, after they were at a record low at the start of the year. In spite of this, rate growth has been patchy due to competing factors causing and restraining its growth. Two of the factors causing rates to increase are high inflation and a recovering economy. Nevertheless, new Coronavirus variants such as Omicron have injected uncertainty into the markets and dampened interest rates somewhat. It’s generally expected that rates will rise in the future, and the decision by the Federal Reserve to reduce its bond purchases will contribute to that.

What Do the Current Mortgage Rate Trends Mean for Homebuyers?

In recent weeks we’ve seen rates slowly climb higher. Even so, mortgage interest rates are still abnormally low, from the perspective of mortgage rates history.

Low interest rates can help offset rising home prices for first-time homebuyers. There are signs the housing market is starting to cool down, but high home values can overshadow the potential savings from a low mortgage rate. Rate increases may require homebuyers to adjust their budgets to accommodate the increased cost.

What to Know About Loans Fees

If you take out a home loan, your decision should factor in the loan’s closing costs. These fees include loan origination fees, prepaid interest, and property taxes, and can range from 3 to 6% of the loan amount.. Choosing a higher interest rate in exchange for lender credit can reduce your upfront costs. The strategy can save you money in the short-term, so it’s worth considering if you plan to sell or refinance your home within five to eight years.

Looking at Today’s Mortgage Refinance Rates

Refinancing became a bit more expensive today as 30-year fixed and 15-year fixed refinance mortgages saw their mean rates increase. Shorter term, 10-year fixed-rate refinance mortgages also moved up.

The average refinance rates are as follows:

Current Mortgage Rates.

30-Year Fixed Mortgage Rates

The average 30-year fixed mortgage interest rate is 3.34%, which is an increase of 10 basis points from seven days ago.

15-Year Mortgage Interest Rates

The median rate for a 15-year fixed mortgage is 2.62%, which is an increase of 12 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. But, 15-year loans have some considerable benefits: You’ll pay thousands less in interest and pay off your loan much earlier.

5/1 ARM Interest Rates

A 5/1 ARM has an average rate of 2.75%, which is a climb of 1 basis point from the same time last week.

An adjustable-rate mortgage is ideal for individuals who will sell or refinance before the rate changes. If that’s not the case, their interest rates could end up being significantly 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 Calculate Our Mortgage Rates

To see where mortgage rates are going, we rely on information collected by Bankrate, which is owned by the same parent company as NextAdvisor. The daily rates survey focuses on home loans where the borrower has a FICO score of 740 or more, a loan-to-value ratio (LTV) of 80% or better, and the home is occupied by the owner.

The mortgage interest rate data listed below and based on the Bankrate mortgage rate survey:

Rates as of January 5, 2022.

Pro Tip

Plug and play your desired mortgage or refinance rate and other estimated figures into NextAdvisor’s mortgage calculator to see what your monthly payment may look like.

Mortgage Rate Frequently Asked Questions (FAQ):

How to Get the Best Mortgage Rate

There are two key considerations to getting the lowest interest rate: Loan-to-value ratio (LTV), and your credit score.

To get the lowest rate, you’ll need a credit score somewhere between 700-800. Having a credit score above 800 is nice, but will likely have no major impact on your rate.

Mortgage providers give the most substantial mortgage rate reductions to home buyers that are deemed less risky. One surefire way to show you’re more likely to make your monthly payments is to make a larger down payment. 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).

When Should I Lock in My Mortgage Rate?

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 so 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 offer an extension of the lock, however, you might have to pay a fee for that privilege.


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