Current mortgage interest rates as of July 15, 2022: rising trend in fixed rates

A few major mortgage rates went up today. Both the average 15-year and 30-year fixed mortgage interest rates increased. At the same time, the average rates for 5/1 adjustable rate mortgages were reduced.

Mortgage rates have risen fairly steadily since the start of this year and are expected to climb throughout 2022. Of course, interest rates are dynamic and unpredictable, at least on a daily or weekly basis, as they react to a wide variety of economic factors. Right now, inflation and the federal funds rate are particularly influential. The Federal Reserve has raised interest rates three times this year and has signaled its intention to raise them again in an attempt to contain inflation. This will likely mean higher mortgage rates and, for potential borrowers, higher monthly mortgage payments. As such, homebuyers may have a better chance of securing a lower mortgage interest rate sooner rather than later. It’s always a good idea to interview several lenders to compare rates and fees to find the best mortgage for your particular situation.

30 Year Fixed Rate Mortgages

The average 30-year fixed mortgage rate is 5.79%, up 7 basis points from a week ago. (One basis point equals 0.01%.) The most commonly used loan term is a 30-year fixed mortgage. A 30-year fixed rate mortgage will generally have a higher interest rate than a 15-year fixed rate mortgage, but also a lower monthly payment. You won’t be able to pay off your home as quickly and you’ll pay more interest over time, but a 30-year fixed rate mortgage is a good option if you’re looking to minimize your monthly payment.

15-year fixed rate mortgages

The average rate for a 15-year fixed mortgage is 4.97%, an increase of 8 basis points compared to the same period last week. Compared to a 30-year fixed mortgage, a 15-year fixed mortgage with the same loan value and interest rate will have a higher monthly payment. But a 15-year loan will usually be the best deal, if you can afford the monthly payments. You will generally get a lower interest rate and pay less interest in total because you are paying off your mortgage much faster.

5/1 Adjustable Rate Mortgages

A 5/1 ARM has an average rate of 4.21%, down 4 basis points from last week. You will typically get a lower interest rate (compared to a 30 year fixed mortgage) with a 5/1 variable rate mortgage in the first five years of the mortgage. However, you might end up paying more after this time, depending on the terms of your loan and how the rate changes with the market rate. For this reason, an adjustable rate mortgage can be a good option if you plan to sell or refinance your home before the rate changes. Otherwise, market changes can significantly increase your interest rate.

Mortgage Rate Trends

Although mortgage rates were historically low at the start of 2022, they have been rising fairly steadily since then. The Federal Reserve recently raised interest rates by 0.75 percentage points – the biggest rate increase since 1994 – in a bid to curb record inflation. Generally, when inflation is low, mortgage rates tend to be lower. When inflation is high, rates tend to be higher.

Although the Fed does not directly set mortgage rates, central bank policy actions influence how much you pay to fund your home loan. And the Fed has signaled that it will continue to raise rates this year. So if you’re looking to buy a home in 2022, expect mortgage rates to generally increase as the year progresses.

We use information collected by Bankrate, which is owned by the same parent company as CNET, to track daily mortgage rate trends. This table summarizes the average rates offered by lenders in the United States:

Today’s Mortgage Interest Rates

Rates exact as of July 15, 2022.

How to find the best mortgage rates

To find a personalized mortgage rate, meet with your local mortgage broker or use an online mortgage service. Be sure to consider your current finances and goals when looking for a mortgage. A range of factors, including your down payment, credit score, loan-to-value ratio, and debt-to-income ratio, will all affect your mortgage interest rate. Having a higher credit score, larger down payment, low DTI, low LTV, or any combination of these factors can help you get a lower interest rate. Along with the mortgage interest rate, additional costs including closing costs, fees, discount points, and taxes can also affect the cost of your home. You should shop around with multiple lenders — including credit unions and online lenders in addition to local and national banks — to get a mortgage that’s right for you.

What is a good loan term?

When choosing a mortgage, it is important to consider the length of the loan or the payment schedule. The most common loan terms are 15 and 30 years, although there are also 10, 20 and 40 year mortgages. Mortgages are further divided into fixed rate and variable rate mortgages. For fixed rate mortgages, the interest rates are the same throughout the life of the loan. Unlike a fixed rate mortgage, an adjustable rate mortgage’s interest rates are only the same for a certain amount of time (most often five, seven or 10 years). After that, the rate adjusts annually based on the market rate.

An important factor to consider when choosing between a fixed rate and an adjustable rate mortgage is how long you plan to stay in your home. For people who plan to live long term in a new home, fixed rate mortgages may be the best option. Fixed rate mortgages offer more stability over time compared to adjustable rate mortgages, but adjustable rate mortgages can sometimes offer lower interest rates upfront. However, you might get a better deal with an adjustable rate mortgage if you only plan to keep your home for a few years. The best loan term is entirely up to your situation and goals, so be sure to consider what’s important to you when choosing a mortgage.

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