Mortgage rates as of April 8, 2022: rate hike
A variety of major mortgage rates rose today. Both the average 15-year and 30-year fixed mortgage interest rates increased. At the same time, average rates for 5/1 adjustable rate mortgages also increased.
Mortgage rates have been slowly rising since the beginning of this year and are expected to rise throughout 2022. Although rates are above their all-time highs set at the start of the pandemic, they are still relatively low. Interest rates are dynamic – they go up and down daily due to many economic factors. In general, now is a good time for potential buyers to lock in a lower rate rather than later this year. Talking with several lenders will help you find the best rate available for your financial situation.
30 Year Fixed Rate Mortgages
The average 30-year fixed mortgage rate is 5.04%, up 14 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 smaller monthly payment than a 15 year mortgage, but generally 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 on a 15-year fixed mortgage is 4.18%, an increase of 12 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 result in a higher monthly payment. But a 15-year loan will usually be the best deal, as long as 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 5.03%, up 13 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, you may end up paying more after this period, depending on the terms of your loan and how the rate adjusts to the market rate. If you plan to sell or refinance your home before the rate changes, an ARM may be right for you. If not, market fluctuations can significantly increase your interest rate.
Mortgage Rate Trends
Although 2022 started with low mortgage rates, there has been a slight uptick recently and rates are expected to continue to rise throughout 2022. Mortgage rates are influenced by various economic factors. One of the main ones is government policy set by the Federal Reserve, which raised rates in March for the first time since 2018 in response to record inflation. The Fed plans to raise interest rates six more times this year. However, with the ongoing war in Ukraine, we have seen some fluctuations in mortgage rates, as global instability usually leads to lower interest rates. While you can expect rates to rise and fall for these reasons, in general, if you’re looking to buy a home in 2022, you should be prepared for interest rates to continue to rise.
We use data 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
|Type of loan||Interest rate||A week ago||Switch|
|30-year fixed rate||5.04%||4.90%||+0.14|
|Fixed rate over 15 years||4.18%||4.06%||+0.12|
|30-year jumbo mortgage rate||3.43%||3.31%||+0.12|
|30-year mortgage refinance rate||5.06%||4.88%||+0.18|
Updated April 8, 2022.
How to find the best mortgage rates
You can get a personalized mortgage rate by connecting with your local mortgage broker or using an online calculator. In order to find the best home loan, you will need to consider your current goals and finances. Things that affect the mortgage rate you might get include: your credit score, your down payment, your loan-to-value ratio, and your debt-to-income ratio. Having a higher credit score, higher down payment, low DTI, low LTV, or any combination of these factors can help you get a lower interest rate. Besides the interest rate, factors such as closing costs, fees, discount points, and taxes can also factor into the cost of your home. Be sure to talk to a variety of lenders — such as local and national banks, credit unions, and online lenders — and a comparison store to find the best mortgage for you.
What is a good loan term?
When choosing a mortgage, remember to consider the length of the loan or the payment schedule. The most commonly offered mortgage terms are 15 and 30 years, although you can also find 10, 20 and 40 year mortgages. Mortgages are further divided into fixed rate and variable rate mortgages. Interest rates on a fixed rate mortgage are fixed for the term of the loan. For adjustable rate mortgages, the interest rates are fixed for a certain number of years (usually five, seven or 10 years), then the rate adjusts annually according to the market rate.
One thing to consider when choosing between a fixed rate and variable rate mortgage is how long you plan to stay in your home. Fixed rate mortgages might be better suited if you plan to live in a house for a while. Fixed rate mortgages offer more stability over time compared to adjustable rate mortgages, but adjustable rate mortgages may offer lower interest rates upfront. However, you might 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 depends on individual circumstances and goals, so be sure to consider what’s important to you when choosing a mortgage.