Daily mortgage rates end the week up | January 15 & 16, 2022

The interest rate on a 30-year fixed rate mortgage ended the week higher, averaging 3.898%. Refinance loans also saw an increase with the 30-year rate at 4.037%.

Mortgage rates have been rising steadily since the beginning of the year. Although higher rates can be daunting, they are still relatively low and offer qualified borrowers the opportunity to benefit from low rates and monthly payments on a new mortgage or refinance loan.

  • The last rate on a 30-year fixed rate mortgage is 3.898%.
  • The final rate on a 15-year fixed rate mortgage is 2.91%. ⇑
  • The latest rate on a 5/1 ARM is 2.442%. ⇔
  • The last rate on a 7/1 ARM is 3.781% ⇓
  • The latest rate on a 10/1 ARM is 4.017%. ⇓

Money‘s daily mortgage rates reflect what a borrower with a 20% down payment and a credit score of 700 — roughly the national average score — could pay if he or she applied for a home loan right now. Each day’s rates are based on the average rate that 8,000 lenders offered applicants the previous business day. Freddie Mac weekly rates will generally be lower, as they measure the rates offered to borrowers with higher credit scores.

Today’s 30-Year Fixed Rate Mortgage Rates

  • The 30-year rate is 3.898%.
  • It’s a day infold by 0.026 percentage points.
  • It’s a month to augment by 0.299 percentage points.

The 30-year fixed rate mortgage is preferred by most borrowers because of its long repayment term, which results in relatively low and regular monthly payments. People also love the predictable interest rate, which won’t change unless you refinance. The potential downside is that the interest rate will be higher compared to a short-term loan, which means you’ll pay more for this type of loan over time.

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Average mortgage rates

Data based on US mortgages closed on January 13, 2022

Type of loan January 13 Last week Change
15-year fixed conventional 2.91% 2.66% 0.25%
30-year fixed conventional 3.9% 3.74% 0.16%
ARM rate 7/1 3.78% 3.39% 0.39%
ARM rate 10/1 4.02% 3.73% 0.29%

Your actual rate may vary

15 years today fixed rate mortgage rates

  • The 15-year rate is 2.91%.
  • It’s a day infold by 0.047 percentage points.
  • It’s a month infold by 0.341 percentage points.

A 15-year fixed-rate mortgage will have a lower interest rate than a longer-term loan, which means you’ll pay less money over the term of the mortgage. The downside is that the short term means monthly payments will be higher and may not be as affordable.

The latest rates of adjustable rate mortgages

  • The latest rate on a 5/1 ARM is 2.442%. ⇔
  • The latest rate on a 7/1 ARM is 3.781%. ⇓
  • The latest rate on a 10/1 ARM is 4.017%. ⇓

Variable rate mortgages are a different option. The interest rate will initially be fixed and then change at predictable intervals. The rate on a 5/1 ARM, for example, will be fixed for five years and then change every year. The advantage of an ARM is that the initial interest rate is very low. The potential downside is that once the loan becomes adjustable, the rate can increase significantly, which also leads to higher monthly payments.

The Latest VA, FHA, and Jumbo Loan Rates

The average rates for FHA, VA, and jumbo loans are:

  • The rate on a 30-year FHA mortgage is 3.667%. ⇔
  • The rate for a 30-year VA mortgage is 3.688%. ⇓
  • The rate for a 30-year jumbo mortgage is 3.555%. ⇔

The latest mortgage refinance rates

The average refinance rates for 30-year loans, 15-year loans and ARMs are:

  • The refinance rate on a 30-year fixed rate refinance is 4.037%. ⇑
  • The refinance rate on a 15-year fixed rate refinance is 3.045%. ⇑
  • The rollover rate on a 5/1 ARM is 2.737%. ⇔
  • The refinance rate on a 7/1 ARM is 3.922%. ⇓
  • The rollover rate on a 10/1 ARM is 4.165%. ⇓
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Average Mortgage Refinance Rates

Data based on US mortgages closed on January 13, 2022

Type of loan January 13 Last week Change
15-year fixed conventional 3.05% 2.77% 0.28%
30-year fixed conventional 4.04% 3.87% 0.17%
ARM rate 7/1 3.92% 3.89% 0.03%
ARM rate 10/1 4.17% 4.11% 0.06%

Your actual rate may vary

Where are mortgage rates going this year?

Mortgage rates have fallen through 2020. Millions of homeowners have responded to low mortgage rates by refinancing existing loans and taking out new ones. Many people bought homes they might not have been able to afford if rates were higher. In January 2021, rates briefly fell to lowest levels on record, but rose slightly for the rest of the year.

Looking ahead, experts believe that interest rates will rise further in 2022, but also modestly. Factors that could affect rates include continued economic improvement and further labor market gains. The Federal Reserve also began to scale back its purchases of mortgage-backed securities and announced plans to raise the federal funds rate three times in 2022 to combat rising inflation.

While mortgage rates are likely to rise, experts say the increase won’t happen overnight and it won’t be a dramatic jump. Rates are expected to remain near historic lows throughout the first half of the year, rising slightly later in the year. Even with rising rates, it will still be a good time to finance a new home or refinance a mortgage.

Factors that influence mortgage rates include:

  • The Federal Reserve. The Fed acted quickly when the pandemic hit the United States in March 2020. The Fed announced its intention to keep money flowing in the economy by lowering the Federal Fund short-term interest rate between 0% and 0.25%, which is also low as you go. The central bank also pledged to buy mortgage-backed securities and treasury bills, supporting the housing finance market, but began to scale back those purchases in November.
  • The 10-year Treasury bond. Mortgage rates keep pace with government 10-year Treasury bond yields. Yields first fell below 1% in March 2020 and have since risen. On average, there is typically a 1.8 point “spread” between Treasury yields and benchmark mortgage rates.
  • The wider economy. Unemployment rates and changes in gross domestic product are important indicators of the overall health of the economy. When employment and GDP growth are weak, it means the economy is weak, which can lower interest rates. Thanks to the pandemic, unemployment levels reached historic highs early last year and have yet to recover. GDP has also taken a hit, and although it has rebounded somewhat, there is still plenty of room for improvement.

Tips for getting the lowest possible mortgage rate

There is no universal mortgage rate that all borrowers receive. Qualifying for the lowest mortgage rates takes some work and will depend on both personal financial factors and market conditions.

Check your credit score and your credit report. Mistakes or other red flags can lower your credit score. Borrowers with the highest credit scores are the ones who will get the best rates, so it’s essential to check your credit report before you begin the home hunting process. Taking steps to correct mistakes will help increase your score. If you have high credit card balances, paying them off can also give you a quick boost.

Save money for a large down payment. This will lower your loan-to-value ratio, which is the share of the house price that the lender has to finance. A lower LTV usually translates to a lower mortgage rate. Lenders also like to see money that has been saved in an account for at least 60 days. It tells the lender that you have the money to finance the home purchase.

Shop around for the best rate. Don’t settle for the first interest rate a lender offers you. Check with at least three different lenders to see who offers the lowest interest rate. Also consider different types of lenders, such as credit unions and online lenders in addition to traditional banks.

As well. take the time to learn about the different types of loans. Although the 30-year fixed rate mortgage is the most common type of mortgage, consider a shorter-term loan such as a 15-year mortgage or an adjustable rate mortgage. These types of loans often come with a lower rate than a conventional 30-year mortgage. Compare the costs of all to see which best suits your needs and financial situation. Government loans — such as those backed by the Federal Housing Authority, Department of Veterans Affairs, and Department of Agriculture — may be more affordable options for those who qualify.

Finally, lock in your rate. Locking in your rate once you’ve found the right rate, the right loan product, and the right lender will help ensure that your mortgage rate doesn’t increase before the loan is closed.

Our mortgage rate methodology

Money’s Daily Mortgage Rates show the average rate offered by more than 8,000 lenders across the United States for which the most recent rates are available. Today we are posting rates for Thursday, January 13, 2022. Our rates reflect what a typical borrower with a credit score of 700 might expect to pay for a home loan at this time. These rates were offered to people depositing 20% ​​deposit and include discount points.

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