Mortgage Rates for Sep. 30, 2022: Rates Increase – CNET [CNET]

Today a handful of notable mortgage rates ticked up. If you’re shopping for a home loan, see how your payments might be affected by inflation.

>A couple of principal mortgage rates climbed up today. The average 15-year fixed and 30-year fixed mortgage rates both inched upward. For variable rates, the 5/1 adjustable-rate mortgage also climbed higher.

Mortgage rates have been increasing consistently since the start of 2022, following in the wake of a series of interest 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 unmistakeable 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

For a 30-year, fixed-rate mortgage, the average rate you’ll pay is 6.83%, which is a growth of 28 basis points compared to one week ago. (A basis point is equivalent to 0.01%.)Thirty-year fixed mortgages are the most common loan term. A 30-year fixed rate mortgage will usually have a smaller 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 6.00%, which is an increase of 27 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. However, as long as you can afford the monthly payments, there are several benefits to a 15-year loan. You’ll typically 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 adjustable-rate mortgage has an average rate of 5.22%, an uptick of 35 basis points from seven days ago.You’ll usually 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. But shifts in the market might 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 could make sense for you. But if that’s not the case, you may be on the hook for a much higher interest rate if the market rates shift.

Mortgage rate trends

Though mortgage rates were historically low at the beginning of 2022, they have been increasing 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 five 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 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

Product	Rate	Last week	Change
30-year fixed	6.83%	6.55%	+0.28
15-year fixed	6.00%	5.73%	+0.27
30-year jumbo mortgage rate	6.81%	6.55%	+0.26
30-year mortgage refinance rate	6.83%	6.55%	+0.28

Rates as of Sep. 30, 2022.

How to shop for the best mortgage rate

When you are ready to apply for a loan, you can connect with a local mortgage broker or search online. In order to find the best home mortgage, you’ll need to take into account your goals and overall financial situation.

Specific mortgage rates will vary based on factors including credit score, down payment, debt-to-income ratio and loan-to-value ratio. Having a good credit score, a larger down payment, a low DTI, a low LTV, or any combination of those factors can help you get a lower interest rate.

The interest rate isn’t the only factor that affects the cost of your home — be sure to also consider other costs such as fees, closing costs, taxes and discount points. Be sure to comparison shop with multiple lenders — like credit unions and online lenders in addition to local and national banks — in order to get a loan that’s the best fit for you.

What is a good loan term?

When picking a mortgage, you should 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. Another important distinction is between fixed-rate and adjustable-rate mortgages. The interest rates in a fixed-rate mortgage are stable for the duration of the loan. For adjustable-rate mortgages, interest rates are the same for a certain number of years (commonly five, seven or 10 years), then the rate changes annually based on the current interest rate in the market.

One thing to think about when deciding between a fixed-rate and adjustable-rate mortgage is how long you plan on living in your house. For people 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 in comparison to adjustable-rate mortgages, but adjustable-rate mortgages may offer lower interest rates upfront. If you aren’t planning to keep your new home for more than three to 10 years, however, an adjustable-rate mortgage could give you a better deal. The best loan term all depends on your own situation and goals, so be sure to take into consideration what’s important to you when choosing a mortgage.