Mortgage interest rates on February 17, 2022: the rate trend is still on the rise

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Mortgage rates, including 15-year fixed and 30-year fixed mortgage rates, continue to climb to the highest levels since before the pandemic. The average rate of 5/1 adjustable rate mortgages also increased. With mortgage rates hitting historic lows over the past period, now was a good time for potential buyers to lock in a fixed rate. However, rates fluctuate and are expected to continue to rise. Before buying a home, consider your personal needs and financial situation, and remember to talk to several lenders to find the best one for you.

30 Year Fixed Rate Mortgages

The average interest rate on a standard 30-year fixed mortgage is 4.23%, up 25 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 usually have a lower monthly payment than a 15 year one, but usually a higher interest rate. Although you’ll pay more interest over time – you’re paying off your loan over a longer period – if you’re looking for a lower monthly payment, a 30-year fixed mortgage may be a good option.

15-year fixed rate mortgages

The average rate for a 15-year fixed mortgage is 3.54%, an increase of 20 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. However, if you can afford the monthly payments, a 15-year loan has several advantages. These typically include the ability to get a lower interest rate, pay off your mortgage sooner, and pay less total interest over the long term.

5/1 Adjustable Rate Mortgages

A 5/1 variable rate mortgage has an average rate of 4.25%, up 26 basis points from the same time last week. With an ARM mortgage, you’ll typically get a lower interest rate than a 30-year fixed mortgage for the first five years. But you might end up paying more after that time, depending on the terms of your loan and how the rate changes with the market rate. For borrowers who plan to sell or refinance their home before the rate changes, an adjustable rate mortgage may be a good option. Otherwise, market fluctuations could significantly increase your interest rate.

Mortgage Rate Trends

While 2022 started off with low mortgage rates, they have recently seen a rise. There are two major factors at play here: rising inflation rates and a growing economy. That said, rates can always go up and down for a variety of reasons. The spread of the omicron, for example, kept rates relatively low throughout December and into the new year. Overall, rates are expected to rise in 2022, notably with the decision of the Federal Reserve to reduce its bond purchases and to increase interest rates.

We use rates 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:

Current Average Mortgage Interest Rates

Type of loan Interest rate A week ago Change
30-year fixed rate 4.23% 3.98% +0.25
Fixed rate over 15 years 3.54% 3.34% +0.20
30-year jumbo mortgage rate 2.89% 2.85% +0.04
30-year mortgage refinance rate 4.24% 4.01% +0.23

Updated February 17, 2022.

How to find the best mortgage rates

When you’re ready to apply for a loan, you can connect with a local mortgage broker or search online. When shopping for residential mortgage rates, consider your current goals and finances. Specific interest rates will vary based on factors such as credit rating, down payment, debt to income ratio and loan to value ratio. 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. Be sure to compare with multiple lenders — like credit unions and online lenders in addition to local and national banks — to get a mortgage that’s best for you.

How does the loan term affect my mortgage?

One important thing to keep in mind when choosing a mortgage is the term of the loan or the payment schedule. The most common mortgage 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. For variable rate mortgages, interest rates are fixed for a number of years (usually five, seven or 10 years) and then the rate changes each year based on the current interest rate in the market.

One thing to think about when deciding between a fixed rate and adjustable rate mortgage is how long you plan to live in your home. If you 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 than adjustable rate mortgages, but adjustable rate mortgages can sometimes offer lower interest rates upfront. If you don’t plan to keep your new home for more than three to ten years, an adjustable rate mortgage may give you a better deal. There is no best loan term as a general rule; it all depends on your goals and your current financial situation. Be sure to do your research and know your own priorities when choosing a mortgage.

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