Current mortgage interest rates as of July 20, 2022: rates are rising

Some prime mortgage rates went up today. Average 15-year fixed and 30-year fixed mortgage rates both increased slightly. Average rates for 5/1 adjustable rate mortgages were also raised.

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 interest rate on a standard 30-year fixed mortgage is 5.81%, up 12 basis points from seven days ago. (One basis point equals 0.01%.) Thirty-year fixed mortgages are the most commonly used loan term. A 30-year fixed rate mortgage will generally have a lower monthly payment than a 15-year one, but often a higher interest rate. 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 4.98%, 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, as long as 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 adjustable rate home loan has an average rate of 4.26%, up 4 basis points from a week ago. With an ARM mortgage, you’ll typically get a lower interest rate than a 30-year fixed mortgage for the first five years. However, market fluctuations may cause your interest rate to increase after this period, as stated in the terms of your loan. For this reason, an adjustable rate mortgage could be a good option if you plan to sell or refinance your home before the rate changes. But if not, you may end up paying a much higher interest rate if market rates change.

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 data collected by Bankrate, which is owned by the same parent company as CNET, to track these daily rates. This table summarizes the average rates offered by lenders nationwide:

Current Average Mortgage Interest Rates

Type of loan Interest rate A week ago To change
30-year fixed rate 5.81% 5.69% +0.12
Fixed rate over 15 years 4.98% 4.90% +0.08
30-year jumbo mortgage rate 5.78% 5.67% +0.11
30-year mortgage refinance rate 5.74% 5.68% +0.06

Updated July 20, 2022.

How to Shop for the Best Mortgage Rate

You can get a personalized mortgage rate by contacting your local mortgage broker or using an online calculator. When looking at mortgage rates, consider your current goals and finances. Factors that affect the interest rate you might get on your mortgage include: your credit score, your down payment, your loan-to-value ratio, and your debt-to-income ratio. Typically, you want a good credit score, larger down payment, lower DTI, and lower LTV to get a lower interest rate. Besides the mortgage interest rate, other factors 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 the best loan term?

An important factor to consider when choosing a mortgage loan is the length of the loan or the payment schedule. The most commonly offered mortgage terms are 15 and 30 years, although you can also find 10, 20 and 40 year mortgages. Mortgages are further divided into fixed rate and variable rate mortgages. For fixed rate mortgages, interest rates are stable for the life of the loan. Unlike a fixed rate mortgage, the interest rates on an adjustable rate mortgage are only fixed for a certain period of time (most often five, seven or 10 years). After that, the rate changes every year depending on the current interest rate in the market.

When choosing between a fixed rate and variable rate mortgage, you need to consider how long you plan to live in your home. Fixed rate mortgages might be better suited if you plan to live in a house for a while. While variable rate mortgages may have lower interest rates initially, fixed rate mortgages are more stable over time. 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 depends entirely on your situation and goals, so be sure to consider what’s important to you when choosing a mortgage.

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