Mortgage interest rates today, April 1, 2022 | Rates remain high
A number of major mortgage rates all went up today. The dramatic increase in borrowing costs for 30-year fixed rate mortgages is notable, but 15-year fixed rates have also increased. The most common type of adjustable rate mortgage is the 5/1 Adjustable Rate Mortgage (ARM) also climbed.
Almost two years have passed with record mortgage rates. Now 2022 has started with rates reaching pre-pandemic levels.
Don’t cancel your home purchase or refinance plans just yet. Even though rates are higher than they were in 2021, they remain historically low. Only a few years ago, 30-year fixed rates were in the top 5%.
Either way, home buying decisions take a lot more into consideration besides the interest rate. Buying a house is making a lifestyle choice. What happens in the interest rate market can influence a decision, it is wise not to base it on just a few basis points of a mortgage rate. Setting and sticking to a realistic home buying budget is far more important than the rate you get.
Let’s take a look at current mortgage rates, where rates have been in the past, and what it all means for the borrower.
Mortgage rates are currently:
Mortgage Rate Forecasting: What’s Driving Changes in Mortgage Rates?
Since the beginning of the year, mortgage rates have risen considerably. An economy recovering from the pandemic and high inflation are two of the factors behind the rate hike. Most of the year will be spent raising the Federal Reserve’s short-term interest rate and making other changes to deal with high inflation, which could increase borrowing costs.
Due to other trends, the market has become more uncertain and volatile. The first is Russia’s war in Ukraine, which has had repercussions on global financial markets, including rising gas prices and falling stock prices. Another concern is the resurgence of COVID-19. The Omicron variant has generally declined in the United States, but its future cannot be predicted with certainty.
Almost all experts agree that mortgage rates will rise throughout 2022. There will be a lot of short-term volatility.
Current Mortgage Rates: Are They Good for Buying a Home Right Now?
Despite the dramatic increases, mortgage rates remain at relatively low levels and are still considered historically favorable mortgage rates.
Low interest rates can help offset rising house prices. But as rates rise, this will also contribute to the rising cost of ownership. Prices have risen significantly from pre-pandemic levels, with a combination of limited supply of homes, higher construction costs and massive buyer demand driving the spike.
It’s also important to remember that while mortgage rates are significant and a difference of a point or two can mean a lot of money on a 30-year mortgage, experts advise against trying to time the market to get the best mortgage rate. Focus on finding the right home, and do it when your personal lifestyle and financial situation indicate it’s the right time. Shop around for a mortgage lender to get the best deal possible at that time – lender rates can vary widely.
Why is it important to look at the 30-year fixed mortgage rate history?
Currently, rates are higher than they were in the low rate years of 2020 and 2021, but are still not too high if you zoom out before that time. Rates were well above 4% in 2018-19. A “good” rate before 2008 was around 5%. Despite crossing the psychological barrier of 4%, mortgage interest rates remain very good in the long term.
Bankrate survey data is generally used on this page, but Freddie Mac survey data is shown here. Freddie Mac is a government sponsored organization that collects mortgage data. Rates shown here may differ from rates on other charts, but historically they generally follow each other. A look back at historic Freddie Mac rates can give you a good idea of how current rates compare to those of the past two decades.
Watch out for loan fees
The umbrella term for what you pay to take out a mortgage is closing costs. This includes lender fees and escrow fees, such as taxes and insurance. These fees vary depending on the size of your loan, but typically range from 3% to 6% of your loan balance. Your closing costs play a crucial role in determining your annual percentage rate (APR). In other words, the higher your closing costs, the higher your APR will be.
Current Mortgage Refinance Rates
Refinance rates made headlines today. We have seen a meteoric rise in rates for 30-year fixed loans. Interestingly, 15-year fixed rate refinances moved in the opposite direction and fell. Shorter term 10-year fixed rate refinance mortgages have declined.
The average refinancing rates are as follows:
Check out the mortgage rates that meet your specific needs.
30-year mortgage rates
The average 30-year fixed mortgage rate is 4.89%, up 36 basis points from the previous week.
15-year mortgage rates
The median rate for a 15-year fixed mortgage is 4.05%, up 20 basis points from a week ago.
The monthly payment for a 15-year fixed rate mortgage is larger and will take up more of your monthly budget than a 30-year mortgage. However, 15-year loans have significant benefits: you’ll pay thousands less in interest and pay off your loan much sooner.
5/1 ARM Mortgage Rates
A 5/1 ARM has an average rate of 3.28%, an increase of 11 basis points from the same period last week.
An ARM 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 your rate could increase and your payment could increase by hundreds of dollars per month.
How our mortgage interest rates are calculated
To see where mortgage rates are moving, we rely on information collected by Bankrate, which is owned by the same parent company as NextAdvisor. The Daily Rates survey focuses on home loans where the borrower has a FICO score of 740 or higher, an LTV of 80% or lower, and the home is a primary residence.
This table shows current average rates based on information provided to Bankrate by lenders nationwide:
Rates as of April 1, 2022.
Use our mortgage calculator to see how your monthly payment changes based on factors like your mortgage rate, down payment and home insurance.
Frequently Asked Questions (FAQ) About Mortgage Rates:
How to get the best mortgage rate?
Getting loan offers from a few lenders is a great way to get the lowest mortgage rate.
The mortgage rate you get depends on a number of factors that lenders consider when assessing the risk of giving you a mortgage. Your credit score has an impact on your mortgage rate. And even the value of the property relative to your loan balance matters. So putting more money into your down payment can lower your mortgage rate.
But lenders will view your situation differently. Thus, you can give the same documentation to three different lenders and obtain offers with three different mortgage rates and fees that vary equally.
When should I lock in my mortgage rate?
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.
A rate lock will only last for a certain amount of time, usually 30 to 60 days. If you have a problem with closing and it looks like your foreclosure rate is expiring, you should contact your lender. It may offer a lock extension, however, you may need to pay a fee for this privilege.