Today’s best mortgage and refinance rates, February 11th, 2022: Rates rise

Average mortgage rates edged higher for all loan terms compared to a week ago, according to data compiled by Bankrate. Rates for 30-year fixed, 15-year fixed, 5/1 ARMs and jumbo loans rose.

Rates accurate as of February 11, 2022.

The rates listed above are Bankrate’s overnight average rates and are based on the assumptions here. Actual rates displayed on-site may vary. This story has been reviewed by Bill McGuire. All rate data accurate as of Friday, February 11th, 2022 at 7:30 a.m.

>>View historical mortgage interest rate movements

You can save thousands of dollars over the life of your mortgage by getting multiple offers. “It is so important to shop around,” says Greg McBride, CFA, Bankrate chief financial analyst. “Not everyone offers the same price, and some lenders may have motivation to be very competitive on price.”

Mortgage rates

Today’s 30-year mortgage rate moves up, +0.15%

The average 30-year fixed-mortgage rate is 3.99 percent, up 15 basis points over the last seven days. A month ago, the average rate on a 30-year fixed mortgage was lower, at 3.51 percent.

At the current average rate, you’ll pay a combined $475.11 per month in principal and interest for every $100k you borrow. That’s an extra $6.87 compared with last week.

15-year fixed mortgage rate moves upward,+0.10%

The average rate for the benchmark 15-year fixed mortgage is 3.33 percent, up 10 basis points since the same time last week.

Monthly payments on a 15-year fixed mortgage at that rate will cost $435 per $100,000 borrowed. The bigger payment may be a little more difficult to find room for in your monthly budget than a 30-year mortgage payment would, but it comes with some big advantages: You’ll save thousands of dollars over the life of the loan in total interest paid and build equity much faster.

5/1 adjustable rate mortgage climbs, +0.01%

The average rate on a 5/1 ARM is 2.86 percent, ticking up 1 basis point over the last week.

Adjustable-rate mortgages, or ARMs, are mortgage loans that come with a floating interest rate. To put it another way, the interest rate can change periodically throughout the life of the loan, unlike fixed-rate loans. These types of loans are best for those who expect to sell or refinance before the first or second adjustment. Rates could be substantially higher when the loan first adjusts, and thereafter.

Monthly payments on a 5/1 ARM at 2.86 percent would cost about $409 for each $100,000 borrowed over the initial five years, but could increase by hundreds of dollars afterward, depending on the loan’s terms.

Jumbo mortgage rate moves upward, +0.16%

The average rate for a jumbo mortgage is 4.00 percent, an increase of 16 basis points over the last week. A month ago, the average rate was lower, at 3.51 percent.

At the current average rate, you’ll pay $475.11 per month in principal and interest for every $100,000 you borrow. That’s an increase of $13.70 over what you would have paid last week.

Rate review: How mortgage rates have changed this week

  • 30-year fixed mortgage rate: 3.99%, up from 3.84% last week, +0.15
  • 15-year fixed mortgage rate: 3.33%, up from 3.23% last week, +0.10
  • 5/1 ARM mortgage rate: 2.86%, up from 2.85% last week, +0.01
  • Jumbo mortgage rate: 4.00%, up from 3.84% last week, +0.16

Mortgage refinance rates

Current 30 year mortgage refinance rate advances, +0.15%

The average 30-year fixed-refinance rate is 4.02 percent, up 15 basis points from a week ago. A month ago, the average rate on a 30-year fixed refinance was lower, at 3.51 percent.

At the current average rate, you’ll pay $475.11 per month in principal and interest for every $100,000 you borrow. That’s up $6.87 from what it would have been last week.

Where are mortgage rates headed?

Mortgage rates plunged early in the pandemic and scraped record lows — below 3 percent — at the start of 2021. The new year, however, has been characterized by rising rates. The days of sub-3 percent mortgage interest on the 30-year fixed are behind us, and many experts think the average rate on this loan will be 3.5 to 4 percent by the end of 2022. That’s still great by historical standards though. The ultra-low rates of 2020 and 2021 were an anomaly, but even 4 percent is a deal in the scheme of things.

“Mortgage rates continue to surge, as they have since the beginning of the year, as the outlook takes shape for Fed rate hikes that are sooner and faster than previously expected,” McBride says. “Mortgage rates are still well below 4 percent but in an environment of already sky-high home prices, more would-be homebuyers are priced out with each move higher in mortgage rates.”

Comparing mortgage terms

The 30-year fixed mortgage is the most popular loan for homeowners. This type of loan has a number of advantages, including:

  • Lower monthly payment: Compared to a shorter term, such as 15 years, the 30-year mortgage offers lower payments spread over time.
  • Stability: With a 30-year mortgage, you lock in a consistent principal and interest payment. Because of the predictability, you can plan your housing expenses for the long term. Remember: Your monthly housing payment can change if your homeowners insurance and property taxes go up or, less likely, down.
  • Buying power: With lower payments, you can qualify for a larger loan amount and a more expensive home.
  • Flexibility: Lower monthly payments can free up some of your monthly budget for other goals, like saving for emergencies, retirement, college tuition or home repairs and maintenance.
  • Strategic use of debt: Some argue that Americans focus too much on paying down their mortgages rather than adding to their retirement accounts. A 30-year fixed mortgage with a smaller monthly payment can allow you to save more for retirement.

That said, shorter term loans have gained popularity as rates have been historically low. Although they have higher monthly payments compared to 30-year mortgages, there are some big benefits if you can afford the upfront costs. Shorter-term loans can help you achieve:

  • Greatly reduced interest costs: Because you pay off the loan faster, you’ll be able to pay less interest overall.
  • Lower interest rate: On top of less time for that interest to compound, most lenders price shorter-term mortgages with lower rates.
  • Build equity faster: The faster you pay off your mortgage, the faster you’ll own value in your home outright. That’s especially handy if you want to borrow against your property to fund other spending.
  • Debt-free sooner: A shorter-term mortgage means you’ll own your house free and clear sooner than you would with a longer-term loan.

How to score the best deal on a mortgage:

  • Shop around. Closing costs and rates vary by lender, so get three bids.
  • Understand the breakeven point. That’s the moment at which the savings in monthly payments offset the amount of the closing costs. This refinance calculator can help you decide.
  • Don’t chase the lowest rate. Yes, a low rate and paltry payment are good, but make sure those benefits aren’t overwhelmed by closing costs.

What comes next:

Today’s featured lenders, February 11, 2022

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