Today’s Mortgage and Refinance Rates, January 4, 2022 | Rates Moved Upward

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Looking at today’s mortgage rates a few notable rates saw growth. The averages for both 30-year fixed and 15-year fixed mortgages both crept higher. The most common type of variable-rate mortgage is the 5/1 adjustable-rate mortgage (ARM) remained steady.

Mortgage rates currently are:

Where Are Mortgage Rates Headed in 2021?

All indications point to all-time low mortgage rates being behind us. Strong economic growth, rising inflation, and concern over COVID-19 variant Omicron are pushing and pulling on interest rates. Normally, when inflation goes up, rates go up as well. We recently saw the Consumer Price Index hit its highest level in nearly 40 years. Anytime a new COVID variant is in the news, there can be added economic uncertainty. Rates are set to rise this year and into 2022, and recent Federal Reserve actions only reinforce the trend. Then again, rates can fluctuate from one day to the next and from week to week.

What These Mortgage Rate Forecast 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.

In the face of rising home values, low interest rates can help homebuyers increase their purchasing power. The housing market is cooling down, but high home values can overshadow the possible savings from a low mortgage rate. As rates slowly go up, homebuyers may need to adjust their homebuying budgets to accommodate the extra cost.

Closing Costs & Loan Fees

The industry term for the upfront fees you pay when you get a home loan is closing costs. Everything from the prepaid property taxes to your appraisal fees fall into this category. These fees vary depending on the size of your loan, but are usually 3% to 6% of your loan balance. Your closing costs play a crucial role in determining your annual percentage rate (APR). In other words, the higher your closing costs, the higher your APR will be..

Current Mortgage Refinance Rates

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

Take a look at today’s refinance rates:

Check out mortgage rates that meet your distinct needs.

30-Year Fixed-Rate Mortgage Rates

For a 30-year fixed-rate mortgage, the average rate you’ll pay is 3.30%, which is an increase of 6 basis points from the previous week.

15-Year Mortgage Interest Rates

The median rate for a 15-year fixed mortgage is 2.57%, which is an increase of 6 basis points from seven days ago.

A 15-year, fixed-rate mortgage’s monthly payment is larger and will put more stress on 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 Mortgage Rates

A 5/1 ARM has an average rate of 2.74%, the same rate compared to last week.

An ARM 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 remarkably 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 payment could end up being hundreds of dollars higher after a rate adjustment, depending on the terms of your loan.

How We Calculate Our Mortgage Rates

To see where mortgage rates are moving, 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 high credit score (740+), a LTV of 80% or lower, and the home is a primary residence.

The table below compares today’s average rates to what they were a week ago, and is based on information provided to Bankrate by lenders from across the country:

Rates accurate as of January 4, 2022.

Pro Tip

Add your interest rate and the rest of your loan details into our mortgage calculator to see an estimated monthly payment.

Mortgage Rate Frequently Asked Questions (FAQ):

How to Get the Best Mortgage Rate

Comparing home loan offers is a great way to secure the lowest mortgage interest rate.

The mortgage rate you get depends on a variety of factors lenders consider when assessing how the likelihood that you’ll be able to afford a mortgage for the long term. Your credit score impacts your mortgage rate. And even the property’s value compared to the size of your mortgage is important. So increasing your down payment can reduce your mortgage interest rate.

But lenders will look at your situation differently. So you can provide the same documentation to three different lenders, and get offers with three different mortgage rates and fees that vary just as much.

Is It a Good Idea to Lock in My Mortgage Rate Right 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 so low right now, you should lock in your rate as soon as you can.

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.

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