iPhone 14 Pro vs. 13 Pro Cameras Tesla Optimus Robot Best Free VPNs Apple Watch 8 Deals AT&T Hidden Fee Settlement Google Pixel 7 Pro Preview Heating Older Homes National Taco Day
Want CNET to notify you of price drops and the latest stories?
No, thank you
Accept

Mortgage Interest Rates for Sept. 19, 2022: Rates Trend Higher

Today some major mortgage rates inched up. As interest rates surge, it's getting more expensive to buy a house.

living room with beige couches, a striped rug and a central chimney
Deborah Jaffe/Getty Images

A number of important mortgage rates increased Monday. The average 15-year fixed and 30-year fixed mortgage rates both saw growth. We also saw an upward trend in the average rate of 5/1 adjustable-rate mortgages.

Though mortgage rates have been rather consistently going up since the start of this year, what happens next depends on whether inflation continues to climb or begins to retreat. Interest rates are dynamic and unpredictable -- at least on a daily or weekly basis -- and they respond to a wide variety of economic factors. Right now, they're particularly sensitive to inflation and the prospect of a US recession.

With so much uncertainty in the market, if you're looking to buy a home, trying to time the market may not play to your favor. If inflation rises and rates climb, this could translate to higher interest rates and steeper monthly mortgage payments. For this reason, 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 30-year fixed mortgage interest rate is 6.33%, which is an increase of 25 basis points from one week ago. (A basis point is equivalent to 0.01%.) Thirty-year fixed mortgages are the most frequently used loan term. A 30-year fixed rate mortgage will usually have a smaller monthly payment than a 15-year one -- but typically a higher interest rate. You won't be able to pay off your house as quickly and you'll pay more interest over time, but a 30-year fixed 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 5.63%, which is an increase of 23 basis points from the same time 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 larger monthly payment. But a 15-year loan will usually be the better deal, as long as you can afford the monthly payments. You'll usually get a lower interest rate, and you'll pay less interest in total because you're paying off your mortgage much quicker.

5/1 adjustable-rate mortgages

A 5/1 ARM has an average rate of 4.76%, an uptick of 23 basis points from seven days ago. For the first five years, you'll typically get a lower interest rate with a 5/1 ARM compared to a 30-year fixed mortgage. However, since the rate adjusts with the market rate, you could end up paying more after that time, as described in the terms of your loan. Because of this, an ARM may be a good option if you plan to sell or refinance your house before the rate changes. If not, shifts in the market may significantly increase your interest rate.

Mortgage rate trends

Though mortgage rates were historically low at the beginning of 2022, they have been climbing somewhat steadily since then. 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 four 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 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:

Current average mortgage interest rates

Loan typeInterest rateA week agoChange
30-year fixed rate6.33%6.08%+0.25
15-year fixed rate5.63%5.40%+0.23
30-year jumbo mortgage rate6.32%6.07%+0.25
30-year mortgage refinance rate 6.32%6.08%+0.24

Updated on Sept. 19, 2022.

How to shop for the best mortgage rate

When you are ready to apply for a loan, you can reach out to a local mortgage broker or search online. In order to find the best home mortgage, you'll need to take into account your goals and overall financial situation. Things that affect what mortgage rate you might get include: your credit score, down payment, loan-to-value ratio and your debt-to-income ratio. Generally, you want a higher credit score, a higher down payment, a lower DTI and a lower LTV to get a lower interest rate.

Besides the mortgage interest rate, other costs, including closing costs, fees, discount points and taxes, might also affect the cost of your house. You should shop around with multiple lenders -- for example, credit unions and online lenders in addition to local and national banks -- in order to get a mortgage loan that's the best fit for you.

What's the best loan term?

One important thing you should consider when choosing a mortgage is the loan term, or payment schedule. The most common loan terms are 15 years and 30 years, although 10-, 20- and 40-year mortgages also exist. Mortgages are further divided into fixed-rate and adjustable-rate mortgages. The interest rates in a fixed-rate mortgage are set for the duration of the loan. For adjustable-rate mortgages, interest rates are stable for a certain number of years (most frequently five, seven or 10 years), then the rate fluctuates annually based on the current interest rate in the market.

When choosing between a fixed-rate and adjustable-rate mortgage, you should think about the length of time you plan to stay in your home. For people who plan on staying long-term in a new house, fixed-rate mortgages may be the better option. Fixed-rate mortgages offer greater stability over time in comparison to adjustable-rate mortgages, but adjustable-rate mortgages can sometimes offer lower interest rates upfront. However, you could get a better deal with an adjustable-rate mortgage if you're only planning to keep your house for a couple years. The best loan term depends on your specific situation and goals, so be sure to take into consideration what's important to you when choosing a mortgage.