Current mortgage interest rates, February 9, 2022 | Rates increased
Looking at today’s mortgage rates, a number of notable rates have gone up. The averages for 30-year and 15-year fixed mortgages both increased slightly. The most common type of variable rate mortgage is the 5/1 Variable Rate Mortgage (ARM) which has also climbed higher.
The averages of the 30-year fixed, 15-year fixed and 5/1 MRAs are:
Mortgage rate forecast: Where are mortgage rates going in 2022?
Over the past few weeks, mortgage rates have been rising rapidly. There are a number of factors behind this, including the strengthening economy and rising inflation, which hit its highest level since 1982 last year. However, it is possible that Omicron or other variants of COVID-19 will limit the rise in mortgage rates.
Due to the reduction in Federal Reserve support for the bond market, rates are expected to rise throughout this year, experts say.
What the Mortgage Rate Forecast Means for Homebuyers
Despite this, mortgage interest rates are still abnormally low, in terms of historical mortgage rates.
In the face of rising home values, low interest rates can help buyers increase their purchasing power. The problem is that, in many cases, interest rates are not low enough to compensate for high house prices. Along with rising house prices, rising interest rates will also increase the cost of buying a home.
Closing costs and loan costs
When you take out a mortgage, your decision should factor in loan closing costs. Closing costs can be anywhere from 3-6% of the loan amount and include fees such as loan origination fees, prepaid interest and property taxes. One way to reduce your outgoings is to accept a higher interest rate in exchange for credit from lenders. This strategy can save you money in the short term, so it’s worth considering if there’s a chance you’ll sell the home or refinance in five to eight years.
Current Mortgage Refinance Rates
Refinancing has become a bit more expensive today as 30-year and 15-year fixed refinance mortgages have seen their average rates increase. Shorter-term 10-year fixed rate refinance mortgages also edged up.
Take a look at today’s refinance rates:
Here are the mortgage rates for different loan styles.
30-year fixed mortgage rates
For a 30-year fixed rate mortgage, the average rate you’ll pay is 3.96%, an increase of 19 basis points from the previous week.
15-year fixed mortgage interest rate
The median rate for a 15-year fixed mortgage is 3.32%, up 17 basis points from seven days ago.
The monthly payment on a 15-year fixed rate mortgage is higher than what you would pay on a 30-year mortgage. However, 15-year loans have significant advantages: you’ll save thousands of dollars in interest and pay off your loan much sooner.
ARM 5/1 tariffs
A 5/1 ARM has an average rate of 2.85%, which is an addition of 1 basis point from seven days ago.
An adjustable rate mortgage is ideal for households that will sell or refinance before the rate changes. If not, their interest rates could end up being significantly higher after a rate adjustment.
For the first five years, a 5/1 ARM will typically have a lower interest rate than a 30-year fixed mortgage. Keep in mind that depending on your loan rate adjustment, your payment may increase significantly.
How We Determine Mortgage Rates
NextAdvisor mortgage interest rate averages are taken from Bankrate daily rate data. These overnight rates are based on a specific personal profile, which only includes loans for primary residences where the borrower has a FICO score of 740+. Bankrate is part of the same parent company as NextAdvisor.
This table shows current average rates based on information provided to Bankrate by lenders nationwide:
Updated February 9, 2022.
Frequently Asked Questions (FAQ) About Mortgage Rates:
How to qualify for the lowest mortgage rate
Your credit score and loan-to-value (LTV) ratio are the most important factors in determining your interest rate.
Having a credit score of at least 750 will help you get the lowest rate. But, even a score of 700+ can get you a noticeable rate reduction compared to a lower credit score. Once your score begins to climb above 800, the interest rate reduction will no longer be significant.
Banks are offering the biggest mortgage rate cuts to buyers of homes that are considered less risky. A surefire way to show that you’re a less risky borrower is to put down a bigger down payment. A down payment of 20% or more will save you money in two ways: with a lower mortgage rate, and you can avoid paying for private mortgage insurance (PMI).
Is it a good idea to lock in my mortgage rate now?
Mortgage rates go up and down daily, and it’s impossible to time the market. It is therefore wise to lock in your interest rate now, because overall rates are historically favorable.
When you lock in your rate, ask your lender how long the lock is valid. A rate lock can be good for 30-60 days, which will usually give you plenty of time to close before the lock expires. If you want to extend the rate lock, find out about fees, as many lenders charge a fee to extend a rate lock.