A number of important mortgage rates crept higher Friday. The average 15-year fixed and 30-year fixed mortgage rates both climbed up. For variable rates, the 5/1 adjustable-rate mortgage also trended upward.
Mortgage rates have been increasing consistently since the start of 2022, following in the wake of a series of. Interest rates are dynamic and unpredictable -- at least on a daily or weekly basis -- and they respond to a wide variety of economic factors. But the Fed's actions, intended to mitigate the , are having an unmistakable impact on mortgage rates.
If you're looking to buy a home, trying to time the market may not play to your favor. If inflation continues to increase and rates continue to climb, it will likely translate to higher interest rates -- and steeper monthly mortgage payments. As such, you may have better luck locking in 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 seek out multiple lenders to compare rates and fees to find the best mortgage for your specific situation.
30-year fixed-rate mortgages
The average interest rate for a standard 30-year fixed mortgage is 6.55%, which is an increase of 27 basis points compared to one week ago. (A basis point is equivalent to 0.01%.) The most frequently used loan term is a 30-year fixed mortgage. A 30-year fixed rate mortgage will usually have a smaller monthly payment than a 15-year one -- but typically a higher interest rate. Although you'll pay more interest over time -- you're paying off your loan over a longer timeframe -- 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 5.73%, which is an increase of 17 basis points from seven days ago. Compared to a 30-year fixed mortgage, a 15-year fixed mortgage with the same loan value and interest rate will have a bigger monthly payment. However, if you can afford the monthly payments, there are several benefits to a 15-year loan. These include typically being able to get a lower interest rate, paying off your mortgage sooner, and paying less total interest in the long run.
5/1 adjustable-rate mortgages
A 5/1 ARM has an average rate of 4.87%, an uptick of 20 basis points from the same time last week. With an adjustable-rate mortgage, you'll usually 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 shifts with the market rate. Because of this, an ARM might be a good option if you plan to sell or refinance your house before the rate changes. If not, changes in the market could significantly increase your interest rate.
Mortgage rate trends
Though mortgage rates were historically low at the beginning of 2022, they have been climbing steadily since. The Federal Reserve recently raised interest rates by another 0.75 percentage points in an attempt to curb record-high inflation. The Fed has raised rates a total of five times this year, but inflation still remains high. As a general rule, when inflation is low, mortgage rates tend to be lower. When inflation is high, rates tend to be higher.
Though the Fed does not directly set mortgage rates, the central bank's policy actions influence how much you pay to finance your home loan. If you're looking to buy a house in 2022, keep in mind that the Fed has signaled it will continue to raise rates, and mortgage rates could increase as the year goes on. Whether rates follow their upward projection or begin to level out hinges on if inflation actually slows.
We use information collected by Bankrate, which is owned by the same parent company as CNET, to track changes in these daily rates. This table summarizes the average rates offered by lenders across the US:
Today's mortgage interest rates
|Loan term||Today's Rate||Last week||Change|
|30-year mortgage rate||6.55%||6.28%||+0.27|
|15-year fixed rate||5.73%||5.56%||+0.17|
|30-year jumbo mortgage rate||6.55%||6.27%||+0.28|
|30-year mortgage refinance rate||6.55%||6.28%||+0.27|
Rates accurate as of Sept. 23, 2022.
How to find personalized mortgage rates
To find a personalized mortgage rate, speak to your local mortgage broker or use an online mortgage service. When looking into home mortgage rates, think about your goals and current 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 rate. Having a higher credit score, a larger down payment, a low DTI, a low LTV, or any combination of those factors can help you get a lower interest rate.
The interest rate isn't the only factor that affects the cost of your home. Be sure to also consider other costs such as fees, closing costs, taxes and discount points. You should speak with multiple lenders -- such as local and national banks, credit unions and online lenders -- and comparison-shop to find the best loan for you.
How does the loan term impact my mortgage?
When picking a mortgage, it's important to consider the loan term, or payment schedule. The loan terms most commonly offered are 15 years and 30 years, although you can also find 10-, 20- and 40-year mortgages. Mortgages are further divided into fixed-rate and adjustable-rate mortgages. For fixed-rate mortgages, interest rates are stable for the life of the loan. For adjustable-rate mortgages, interest rates are the same for a certain number of years (commonly five, seven or 10 years), then the rate adjusts annually based on the market rate.
When deciding between a fixed-rate and adjustable-rate mortgage, you should consider the length of time you plan to live in your house. Fixed-rate mortgages might be a better fit for those who plan on staying in a home for a while. While adjustable-rate mortgages might have lower interest rates upfront, fixed-rate mortgages are more stable over time. However you may get a better deal with an adjustable-rate mortgage if you only intend to keep your house for a few years. The best loan term for you depends on your specific situation and goals, so make sure to think about what's important to you when choosing a mortgage.