Current mortgage rates for January 21, 2022: rates are increasing

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Some closely watched mortgage rates are now higher today. Both 15-year and 30-year fixed mortgage rates increased slightly. The average rate of the most common type of variable rate mortgage, the 5/1 variable rate mortgage, also rose. Mortgage interest rates are never set in stone, but interest rates are at historic lows. If you’re considering financing a home, now might be the time to lock in a fixed rate. Before buying a home, remember to consider your personal needs and financial situation, and speak with various lenders to find the right one for you.

30 Year Fixed Rate Mortgages

For a 30-year fixed-rate mortgage, the average rate you’ll pay is 3.67%, up 16 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 usually have a lower monthly payment than a 15 year one, but usually 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 3.02%, an increase of 19 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 higher monthly payment. However, if you can afford the monthly payments, a 15-year loan has several advantages. You will most likely 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 3.68%, an addition of 17 basis points from last week. 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 because the rate adjusts to the market rate, you might end up paying more after that time, as described in your loan terms. For this reason, an adjustable rate mortgage can be a good option if you plan to sell or refinance your home before the rate changes. Otherwise, market fluctuations mean your interest rate could be much higher once the rate is adjusted.

Mortgage Rate Trends

We use information collected by Bankrate, which is owned by the same parent company as CNET, to track changes in rates over time. This table summarizes the average rates offered by lenders across the country:

Today’s Mortgage Interest Rates

term of the loan Daily rate Last week Change
30-year mortgage rate 3.67% 3.51% +0.16
Fixed rate over 15 years 3.02% 2.83% +0.19
30-year jumbo mortgage rate 2.78% 2.75% +0.03
30-year mortgage refinance rate 3.65% 3.51% +0.14

Rates exact as of January 21, 2022.

How to Find Custom Mortgage Rates

You can get a personalized mortgage rate by connecting with your local mortgage broker or using an online calculator. When looking at mortgage rates, consider 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, larger down payment, low DTI, low LTV, or any combination of these factors can help you get a lower interest rate. Besides the mortgage 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 – for example, credit unions and online lenders in addition to local and national banks – in order 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 loan 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, interest rates are fixed for the term of the loan. Unlike a fixed rate mortgage, interest rates on an adjustable rate mortgage are only the same for a certain amount of time (usually five, seven or 10 years). After that, the rate changes every year according to the market rate.

When deciding between a fixed rate and variable rate mortgage, you need to consider how long you plan to stay 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 time. If you don’t plan to keep your new home for more than three to 10 years, an adjustable rate mortgage may give you a better deal. 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.

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