Current Mortgage Interest Rates on Mar. 14, 2022: Rates Move Higher – CNET [CNET]

A number of closely followed mortgage rates rose today. 15-year fixed and 30-year fixed mortgage rates both inched upward. The average rate of the most common type of variable-rate mortgage, the 5/1 adjustable-rate mortgage, also rose. Mortgage rates have been quite low over the last period, making it a good time for prospective homebuyers to lock in a fixed rate. But rates are dynamic and are projected to continue to rise this year. Before you buy a house, remember to consider your personal needs and financial situation, and speak with multiple lenders to find the best one for you.

30-year fixed-rate mortgages

For a 30-year, fixed-rate mortgage, the average rate you’ll pay is 4.33%, which is an increase of 23 basis points as seven days ago. (A basis point is equivalent to 0.01%.) The most common 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 often a higher interest rate. Although you’ll pay more interest over time — you’re paying off your loan over a longer timeframe — 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 for a 15-year, fixed mortgage is 3.56%, which is an increase of 16 basis points from seven days ago. You’ll definitely have a higher 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. However, if you can afford the monthly payments, there are several benefits to a 15-year loan. These include typically being able to get a lower interest rate, paying off your mortgage sooner, and paying less total interest in the long run.

5/1 adjustable-rate mortgages

A 5/1 adjustable-rate mortgage has an average rate of 4.35%, an uptick of 26 basis points compared to a week ago. You’ll typically get a lower interest rate (compared to a 30-year fixed mortgage) with a 5/1 adjustable-rate mortgage in the first five years of the mortgage. However, you might end up paying more after that time, depending on the terms of your loan and how the rate shifts with the market rate. Because of this, an adjustable-rate mortgage might be a good option if you plan to sell or refinance your house before the rate changes. If not, shifts in the market may significantly increase your interest rate.

Mortgage rate trends

Although 2022 began with low mortgage rates, there has been an uptick recently. There are two major factors at play here: increasing inflation rates and a growing economy. That said, rates can always rise and fall for a variety of reasons. The spread of omicron, for instance, kept rates relatively low throughout December and the start of the new year. Overall, rates are expected to go up in 2022, particularly with the Federal Reserve’s decision to increase interest rates. 

 We use information collected by Bankrate, which is owned by the same parent company as CNET, to track daily mortgage rate trends. This table summarizes the average rates offered by lenders across the country:

Average mortgage interest rates

Rates as of Mar. 14, 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. Make sure to think about your current finances and your goals when trying to find a mortgage. 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. Generally, you want a good credit score, a higher down payment, a lower DTI and a lower LTV to get a lower interest rate. Aside from the interest rate, factors including closing costs, fees, discount points and taxes might also affect the cost of your house. 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 loan that’s the right fit for you.

What is a good loan term?

When picking a mortgage, it’s important to consider the loan term, or payment schedule. The loan terms most commonly offered are 15 years and 30 years, although you can also find 10-, 20- and 40-year mortgages. Another important distinction is between fixed-rate and adjustable-rate mortgages. For fixed-rate mortgages, interest rates are stable for the life of the loan. For adjustable-rate mortgages, interest rates are stable for a certain number of years (commonly five, seven or 10 years), then the rate changes annually based on the market interest rate.

When deciding between a fixed-rate and adjustable-rate mortgage, you should think about how long you plan to stay in your home. For those who plan on living long-term in a new house, fixed-rate mortgages may be the better option. Fixed-rate mortgages offer greater stability over time in comparison to adjustable-rate mortgages, but adjustable-rate mortgages can sometimes offer lower interest rates upfront. However you may get a better deal with an adjustable-rate mortgage if you only intend to keep your house for a few years. The best loan term all depends on your situation and goals, so be sure to take into consideration what’s important to you when choosing a mortgage.