Although mortgage rates fell briefly earlier in the week, they ended higher this week. The average interest rate on a 30-year fixed-rate loan rose to 4.136%, while the interest rate on a 15-year fixed-rate loan rose to 3.125%. Borrowers looking for a 5/1 adjustable rate mortgage are seeing interest rates averaging 2.789%.

Refinance loan rates also ended the week higher, with the 30-year refinance rate averaging 4.21%. The 15-year and 5/1 ARM refinancing rates both rose to 3.193% and 2.839%, respectively.

• The latest interest rate for a 30-year fixed-rate mortgage is 4.136%.. ⇑
• The latest interest rate for a 15-year fixed-rate mortgage is 3.125%. ⇑
• The latest rate for a 5/1 ARM is 2.789%. ⇑
• The latest rate for a 7/1 ARM is 3.068%. ⇑
• The latest rate for a 10/1 ARM is 3.134%. ⇑

Money’s daily mortgage rates reflect what a borrower with a 20% down payment and a credit score of 700 — about the national average — could pay if he or she applies for a home loan now. Daily rates are based on the average rate offered to applicants by 8,000 lenders over the previous business day. Freddie Mac’s weekly rates will generally be lower because they measure rates offered to borrowers with higher credit scores.

Looking for a loan? Check out Money’s lists of top mortgage lenders and top refinance lenders.

Today’s 30-year fixed-rate mortgage rates

• The 30-year rate is 4.136%.
• That’s one day inwrinkle of 0.07 percentage points.
• That’s a month increase of 0.329 percentage points.

Most borrowers choose a 30-year fixed-rate mortgage because of the stable interest rate, long payback period, and affordable monthly payments. The downside is that the interest rate is higher compared to a short-term loan, which means you will pay more for this type of loan over time.

Today is 15 years old fixed rate mortgage rates

• The 15-year rate is 3.125%.
• That’s one day inwrinkle of 0.06 percentage points.
• That’s a month inwrinkle of 0.413 percentage points.

The benefit of a 15-year fixed-rate mortgage is that it typically has a lower interest rate than a 30-year loan, and you pay it off in half the time. The downside is that the monthly payments are higher than a comparable longer-term loan. This could be a good option if you can afford the higher payments.

The latest rates for adjustable rate mortgages

• The latest rate for a 5/1 ARM is 2.789%. ⇑
• The latest rate for a 7/1 ARM is 3.068%. ⇑
• The latest rate for a 10/1 ARM is 3.134%. ⇑

Variable rate mortgages actually start out with a fixed rate. Once this period ends, the rate becomes variable and resets periodically. For example, a 5/1 ARM has a fixed interest rate for the first five years and then resets every year. The risk with an ARM is that the interest rate could increase significantly once it becomes adjustable. An ARM could be a good option if you want to sell the house before the interest rate becomes floating.

The latest VA, FHA and Jumbo loan rates

The average rates for FHA, VA, and Jumbo loans are:

• The interest rate on a 30-year FHA mortgage is 3.868%. ⇑
• The interest rate on a 30-year VA mortgage is 4.141%. ⇑
• The interest rate on a 30-year jumbo mortgage is 3.852%. ⇑

The latest mortgage refinance rates

The average refinance rates for 30-year loans, 15-year loans, and ARMs are:

• The refinancing rate for a 30-year fixed rate refinancing is 4.21%. ⇑
• The refinancing rate for a 15-year fixed rate refinancing is 3.193%. ⇑
• The refinancing rate for a 5/1 ARM is 2.839%. ⇑
• The refinancing rate for a 7/1 ARM is 3.112%. ⇑
• The refinancing rate for a 10/1 ARM is 3.181%. ⇑

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Average mortgage refinancing rates

Data based on US mortgage loans that closed on February 3, 2022

loan type	3 Feb	Last week	change
15 years fixed price conventional	3.19%	3.43%	0.24%
30 years fixed price conventional	4.21%	4.38%	0.17%
7/1 ARM rate	3.11%	3.17%	0.06%
10/1 ARM rate	3.18%	3.25%	0.07%

Your actual rate may vary

Where are mortgage rates headed this year?

Mortgage rates fell through 2020. Millions of homeowners responded to low mortgage rates by refinancing existing loans and taking out new ones. Many people bought houses that they might not have been able to afford if interest rates were higher. In January 2021, interest rates briefly fell to their lowest level on record, but trended slightly upwards as the year progressed.

Looking ahead, experts assume that interest rates will rise more sharply but also moderately in 2022. Factors that could affect rates include continued economic improvement and further gains in the job market. The Federal Reserve has also begun scaling back purchases of mortgage-backed securities and expects to raise interest rates three times in 2022 to combat rising inflation as early as March.

While mortgage rates are likely to rise, experts say the rise won’t happen overnight and won’t be a dramatic jump. Interest rates should remain at historically low levels in the first half of the year and rise slightly later in the year. Even with rising interest rates, it’s still a good time to finance a new home or refinance a mortgage.

Factors affecting mortgage rates include:

• The Federal Reserve. The Fed acted quickly when the pandemic hit the United States in March 2020. The Fed announced plans to keep the money moving by cutting the short-term Federal Fund interest rate to between 0% and 0.25%, which is as low as they go. The central bank also promised to buy mortgage-backed securities and government bonds to prop up the housing finance market, but began scaling back those purchases in November.
• The 10 year treasury note. Mortgage rates move in step with 10-year Treasury yields. Yields fell below 1% for the first time in March 2020 and have been rising ever since. On average, there is typically a 1.8 point “spread” between government bond yields and benchmark mortgage rates.
• The broader economy. Unemployment rates and changes in gross domestic product are important indicators of the overall health of the economy. When employment and GDP growth are low, it means the economy is weak, which can push interest rates lower. Thanks to the pandemic, the unemployment rate hit an all-time high early last year and has yet to recover. GDP has also taken a hit and while it has recovered somewhat, there is still plenty of room for improvement.

Tips for the lowest possible mortgage rate

There is no universal mortgage rate that all borrowers get. Qualifying for the lowest mortgage rates takes a little work and depends on personal financial factors as well as market conditions.

Check your credit history and credit report. Mistakes or other red flags can drag your credit score down. Borrowers with the highest credit ratings get the best interest rates, so it’s important to check your credit report before you start house hunting. Taking action to fix bugs can increase your score. If you have high credit card balances, paying them off can also give you a quick boost.

Save money for a substantial down payment. This reduces your loan-to-value ratio, which is how much of the home price the lender has to fund. A lower LTV usually translates into a lower mortgage rate. Lenders also like to see money that has been saved in an account for at least 60 days. It tells the lender that you have the money to fund the home purchase.

Look for the best price. Don’t settle for the first interest rate a lender offers you. Check with at least three different lenders to see who offers the lowest interest rates. In addition to traditional banks, consider different types of lenders such as credit unions and online lenders.

Likewise. Take the time to learn about different types of credit. While the 30-year fixed-rate mortgage is the most common type of mortgage, consider a shorter-term loan such as a 15-year loan or an adjustable-rate mortgage. This type of loan is often offered at a lower interest rate than a traditional 30-year mortgage. Compare the costs of each to see which one best suits your needs and financial situation. Government loans — such as those supported by the Federal Housing Authority, the Department of Veterans Affairs, and the Department of Agriculture — may be more affordable options for those who qualify.

Finally, lock in your tariff. Locking your interest rate once you’ve found the right interest rate, loan product, and lender can ensure that your mortgage rate doesn’t go up before you close the loan.

Our mortgage rate methodology

Money’s Daily Mortgage Rates show the average interest rate offered by over 8,000 lenders in the United States for which the most current daily business rates are available. Today we show interest rates for Thursday 3rd February 2022. Our interest rates reflect what a typical borrower with a credit score of 700 might currently expect on a home loan. These rates were offered to people who pay 20% deposit and include discount points.

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