Mortgage interest rates today for July 28, 2022: rate cuts
A few key mortgage rates fell today. Average 15-year and 30-year fixed mortgage interest rates fell. For variable rates, the 5/1 adjustable rate mortgage also fell. Mortgage rates have risen fairly steadily since the start of this year and are expected to remain high throughout 2022. Although interest rates are dynamic and unpredictable – at least on a daily or weekly basis – they react to a wide variety of economic factors.
Right now, inflation and the federal funds rate are particularly influential. The, with further rate hikes expected before the end of the year. For new home buyers, this could mean higher interest rates and higher monthly mortgage payments, especially if inflation remains high. Because of this, you may have a better chance of getting a lower mortgage interest rate sooner rather than later. No matter when you decide to shop for a home, 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 5.57%, down 27 basis points from seven days 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. 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 4.82%, down 18 basis points from a week ago. Compared to a 30-year fixed mortgage, a 15-year fixed mortgage with the same loan value and interest rate will result in a higher monthly payment. But a 15-year loan will generally be the best deal, if you can afford the monthly payments. 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 4.18%, down 8 basis points from seven days ago. For the first five years, you’ll typically get a lower interest rate with a 5/1 variable rate mortgage compared to a 30-year fixed mortgage. But changes in the market could cause your interest rate to increase after this period, as stated in the terms of your loan. For this reason, an ARM can 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 an additional 0.75 percentage points in an effort to curb record inflation. The Fed has raised rates a total of four times this year, but inflation remains high. 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 set mortgage rates directly, 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 rates collected by Bankrate, which is owned by the same parent company as CNET, to track rate changes over time. This table summarizes the average rates offered by lenders nationwide:
Average Mortgage Interest Rates
|Product||Assess||Last week||To change|
|30 years fixed||5.57%||5.84%||-0.27|
|15 years fixed||4.82%||5.00%||-0.18|
|30-year jumbo mortgage rate||5.53%||5.81%||-0.28|
|30-year mortgage refinance rate||5.55%||5.79%||-0.24|
Rates as of July 28, 2022.
How to find the best mortgage rates
When you’re ready to apply for a loan, you can contact a local mortgage broker or search online. In order to find the best home loan, you will need to consider your goals and your overall financial situation. 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. Generally, you want a higher credit score, higher down payment, lower DTI, and lower LTV to get a lower interest rate.
The interest rate isn’t the only factor that affects the cost of your home. Also, be sure to consider other factors such as fees, closing costs, taxes, and discount points. You should talk to several lenders – including local and national banks, credit unions, and online lenders – and a comparison store to find the best mortgage for you.
What is the best loan term?
When choosing a mortgage, remember to consider the length of the loan or the payment schedule. The most commonly offered loan terms are 15 and 30 years, although you can also find 10, 20 and 40 year mortgages. Another important distinction is between fixed rate and adjustable rate mortgages. For fixed rate mortgages, the interest rates are the same throughout the life of the loan. For adjustable rate mortgages, the interest rates are stable for a number of years (usually five, seven or 10 years), then the rate changes annually based on the market interest rate.
One factor to consider when choosing between a fixed rate and variable rate mortgage is how long you plan to live in your home. If you plan to stay in a new home for the long term, fixed rate mortgages may be the best option. While variable rate mortgages may offer lower interest rates initially, fixed rate mortgages are more stable over the long term. However, you may 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.