Mortgage Rates on June 24, 2022: Some Fixed Rates Go Down Since Last Week – CNET [CNET]

As interest rates surge, it’s getting more expensive to buy a house.

A variety of fixed mortgage rates declined today, including the average interest rates for both 15-year fixed and 30-year fixed mortgages. However, the 5/1 adjustable-rate mortgage floated higher.

Mortgage rates have been consistently going up since the start of this year, and are expected to keep climbing throughout 2022. Of course, interest rates are dynamic and unpredictable — at least on a daily or weekly basis — as they respond to a wide variety of economic factors. At the moment, two of those factors — inflation and the federal funds rate — are particularly influential. The Federal Reserve has already increased interest rates three times this year and has signaled its intention to hike rates again to contain inflation. That will almost certainly translate into higher mortgage rates and, for prospective borrowers, steeper monthly mortgage payments. As such, homebuyers may have better luck locking in a lower mortgage interest rate sooner than later. It’s always a good idea to interview multiple lenders to compare rates and fees to find the best mortgage for your specific situation.

30-year fixed-rate mortgages

The average 30-year fixed mortgage interest rate is 5.81%, which is a decrease of 13 basis points from one week ago. (A basis point is equivalent to 0.01%.) Thirty-year fixed mortgages are the most frequently used loan term. A 30-year fixed mortgage will often 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 5.05%, which is a decrease of 14 basis points from the same time last week. Compared to a 30-year fixed mortgage, a 15-year fixed mortgage with the same loan value and interest rate will have a higher monthly payment. But a 15-year loan will usually be the better deal, if you can afford the monthly payments. You’ll most likely 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 4.29%, an uptick of 20 basis points from the same time 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. However, changes in the market might cause your interest rate to increase after that time, as detailed in the terms of your loan. Because of this, an ARM may be a good option if you plan to sell or refinance your house before the rate changes. But if that’s not the case, you might be on the hook for a much higher interest rate if the market rates change.

Mortgage rate trends

Though mortgage rates were historically low at the beginning of 2022, they have been increasing steadily since then. The reason: The Federal Reserve has raised interest rates by 0.75 percentage points just this month — the highest rate increase since 1994 — in an attempt to curb record-high inflation. 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. And the Fed has signaled it will continue to raise rates over the course of this year. So, if you’re looking to buy a house in 2022, expect mortgage rates to increase as the year goes on.

We use rates 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 country:

Average mortgage interest rates

Product	Rate	Last week	Change
30-year fixed	5.81%	5.94%	-0.13
15-year fixed	5.05%	5.19%	-0.14
30-year jumbo mortgage rate	5.77%	5.89%	-0.12
30-year mortgage refinance rate	5.80%	5.94%	-0.14

Rates as of June 24, 2022.

How to find personalized mortgage rates

When you are ready to apply for a loan, you can connect with a local mortgage broker or search online. Make sure to consider your current finances and your goals when trying to find a mortgage. Specific interest 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 higher down payment, a low DTI, a low LTV, or any combination of those factors can help you get a lower interest rate. Aside from the mortgage rate, additional costs including closing costs, fees, discount points and taxes might also impact the cost of your home. Be sure to talk to several different lenders — for example, local and national banks, credit unions and online lenders — and comparison shop to find the best mortgage loan for you.

What’s the best loan term?

When picking a mortgage, remember to consider the loan term, or payment schedule. The most common loan terms are 15 years and 30 years, although 10-, 20- and 40-year mortgages also exist. Mortgages are further divided into fixed-rate and adjustable-rate mortgages. For fixed-rate mortgages, interest rates are the same for the life of the loan. For adjustable-rate mortgages, interest rates are the same for a certain number of years (typically five, seven or 10 years), then the rate fluctuates annually based on the current interest rate in the market.

One factor to consider when choosing between a fixed-rate and adjustable-rate mortgage is the length of time you plan on living 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 might offer lower interest rates upfront. If you aren’t planning to keep your new house for more than three to 10 years, however, an adjustable-rate mortgage may give you a better deal. The best loan term is entirely dependent on your situation and goals, so be sure to consider what’s important to you when choosing a mortgage.