Some closely followed mortgage rates crept higher over the last weeka. The average 15-year fixed and 30-year fixed mortgage rates both saw growth. For variable rates, the 5/1 adjustable-rate mortgage also cruised higher.
Mortgage rates have been increasing consistently since the start of 2022, following in the wake of a series of interest rate hikes by the Federal Reserve. 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, designed to mitigate the high rate of inflation, 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 30-year fixed-mortgage rate average is 7.35%, which is an increase of 25 basis points compared to one week ago. (A basis point is equivalent to 0.01%.) The most common loan term is a 30-year fixed mortgage. A 30-year fixed mortgage will typically have a higher interest rate than a 15-year fixed rate mortgage — but also a lower monthly payment. 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 6.51%, which is an increase of 13 basis points compared to a week ago. You’ll definitely have a bigger monthly payment with a 15-year fixed mortgage compared to a 30-year fixed mortgage, even if the interest rate and loan amount are the same. But a 15-year loan will usually be the better deal, if 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 5.58%, an uptick of 5 basis points compared to last week. For the first five years, you’ll typically get a lower interest rate with a 5/1 adjustable-rate mortgage compared to a 30-year fixed mortgage. But changes in the market could cause your interest rate to increase after that time, as detailed in the terms of your loan. If you plan to sell or refinance your house before the rate changes, an ARM might make sense for you. Otherwise, changes in the market means your interest rate might be much higher once the rate adjusts.
Mortgage rate trends
Though mortgage rates were historically low at the beginning of 2022, they have been rising 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 six 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 data 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:
Current average mortgage interest rates
|Loan type||Interest rate||A week ago||Change|
|30-year fixed rate||7.35%||7.10%||+0.25|
|15-year fixed rate||6.51%||6.38%||+0.13|
|30-year jumbo mortgage rate||7.35%||7.07%||+0.28|
|30-year mortgage refinance rate||7.35%||7.10%||+0.25|
Updated on Nov. 4, 2022.
How to shop for the best mortgage rate
When you’re ready to apply for a loan, you can reach out to a local mortgage broker or search online. When researching home mortgage rates, take into account your goals and current finances.
Things that affect what the interest rate you might get on your mortgage include: your credit score, down payment, loan-to-value ratio and your debt-to-income ratio. Having a higher credit score, a higher down payment, a low DTI, a low LTV or any combination of those factors can help you get a lower interest rate.
Apart from the mortgage interest rate, additional costs including closing costs, fees, discount points and taxes might also factor into the cost of your house. You should speak with a variety of lenders — for example, local and national banks, credit unions and online lenders — and comparison shop to find the best mortgage for you.
What is a good loan term?
When picking a mortgage, it’s important to consider the loan term, or payment schedule. The mortgage 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. The interest rates in a fixed-rate mortgage are fixed for the duration of the loan. For adjustable-rate mortgages, interest rates are stable for a certain number of years (typically five, seven or 10 years), then the rate changes annually based on the market rate.
One thing to take into consideration when choosing between a fixed- and adjustable-rate mortgage is how long you plan on living in your home. For those 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 compared to adjustable-rate mortgages, but adjustable-rate mortgages might offer lower interest rates upfront. If you don’t plan to keep your new home for more than three to 10 years, though, an adjustable-rate mortgage could give you a better deal. The best loan term is entirely dependent on an individual’s situation and goals, so be sure to think about what’s important to you when choosing a mortgage.