Today’s Mortgage Rates Jump Above 3.8% | January 7, 2022

Today's Mortgage Rates Jump Above 3.8% | January 7, 2022
Written by Publishing Team

Mortgages rates for all types of loans have gone up today. The average interest rate on a 30-year fixed-rate loan increased to 3.807%, up 0.108 percentage points from yesterday. This is the highest rate since October of 2020. Meanwhile, the average rate for a 30-year refinancing loan is 3.941%.

The price action in general has been in an uptrend over the past few months. However, it is still historically low. Borrowers with strong credit who are considering buying a home or refinancing a mortgage should still be able to secure a competitive interest rate and attractive monthly payments.

  • The most recent 30-year mortgage rate is 3.807%..
  • The latest 15-year fixed-rate mortgage is 2.712%. ⇑
  • The latest rate on 1/5 ARM is 2.391%. ⇑
  • The latest price on the 7/1 arm is 3.633 ⇑
  • The latest rate on 1/10 ARM is 3.976%. ⇑

The money daily mortgage rates reflect what a borrower with a 20% down payment and a credit score of 700 — roughly the national average score — would pay if they applied for a home loan now. Prices for each day are based on the average rate of 8000 lenders submitted to applicants on the previous business day. Freddie Mac’s weekly rates will generally be lower, as they measure the rates offered to borrowers with higher credit scores.

30-Year Fixed Rate Mortgage Rates Today

  • The 30-year rate is 3.807%.
  • This is one day in awrinkle 0.108 percentage point.
  • This is one month more 0.188 percentage points.

The most common home loan is a 30-year fixed rate mortgage. It is popular thanks to its stable interest rate and monthly payments. The long payback time makes the payments relatively low and easier to bear compared to a short term loan. However, the interest rate is usually higher, so you’ll pay more over time.

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Average Mortgage Rates

Data based on US mortgage loans closed on January 6, 2022

loan type January 6 last week change
15 years traditional fixed 2.71% 2.58% 0.13%
30 years traditional fixed 3.81% 3.67% 0.14%
Rate 7/1 ARM 3.63% 3.1% 0.53%
Rate 1/10 ARM 3.98% 3.15% 0.83%

Your actual price may vary

Today is 15 years old fixed exchange rate Mortgage rates

  • The 15-year rate is 2.712%.
  • This is one day in awrinkle 0.101 percentage point.
  • This is one month in awrinkle 0.124 percentage point.

The shorter payback time of a 15-year fixed rate mortgage can be both an advantage and a disadvantage. The pluses are that you will be able to pay off the loan faster and with lower interest, while the downside is that the monthly installments will be higher compared to those you would lend on a similar 30-year loan. The interest rate is also usually lower than the long-term loan rate, making the 15-year term less expensive over its full term.

Latest Adjustable Mortgage Rates

  • The latest rate on 1/5 ARM is 2.391%. ⇑
  • The latest rate on 7/1 ARM is 3.633%. ⇑
  • The latest rate on 1/10 ARM is 3.976%. ⇑

Another option is an adjustable mortgage. The ARM interest rate will be set initially, then it becomes adjustable and begins to change at specified intervals. The 5/1 ARM rate, for example, is fixed for five years before it changes annually. An adjustable loan may be a good choice for borrowers who plan to sell or refinance before the fixed interest rate period expires, as the initial interest tends to be very low. However, once the rate becomes adjustable, it can jump significantly higher.

Latest FHA, FHA and Jumbo rates

Average rates for FHA loans, FHA loans, and jumbo loans are:

  • The rate on a 30-year mortgage is 3.569%. ⇑
  • The rate on a 30-year mortgage is 3.63%. ⇑
  • The 30-year mortgage rate is 3.68%.

Latest Mortgage Refinance Rates

The average refinancing rates for 30-year loans, 15-year loans, and ARM are:

  • The refinancing rate on the 30-year fixed rate refinancing is 3.941%. ⇑
  • The refinancing rate on the 15-year fixed rate refinancing is 2.838%. ⇑
  • The refinancing rate on 5/1 ARM is 2.688%. ⇑
  • The refinancing rate on the 7/1 arm is 3.895%. ⇑
  • The refinancing rate on 1/10 ARM is 4.166%. ⇑
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Average Mortgage Refinance Rates

Data based on US mortgage loans closed on January 6, 2022

loan type January 6 last week change
15 years traditional fixed 2.84% 2.69% 0.15%
30 years traditional fixed 3.94% 3.84% 0.1%
Rate 7/1 ARM 3.9% 3.23% 0.67%
Rate 1/10 ARM 4.17% 3.73% 0.44%

Your actual price may vary

Where are mortgage rates headed this year?

Mortgage rates have fallen through 2020. Millions of homeowners have responded to lower mortgage rates by refinancing existing loans and taking out new ones. Many people bought homes that they might not have been able to afford if the prices were higher. In January 2021, prices fell briefly to all-time lows, but trended slightly higher during the rest of the year.

Looking ahead, experts believe interest rates will rise further in 2022, but also modestly. Factors that can affect rates include continued economic improvement and further gains in the labor market. The Federal Reserve has also begun to scale back its purchase of mortgage-backed securities and has announced that it expects to raise the federal funds rate three times in 2022 to combat rising inflation.

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

Factors that affect mortgage rates include:

  • Federal Reserve. The Fed took quick action when the pandemic hit the US in March of 2020. The Fed announced plans to keep money moving in the economy by lowering the Fed’s short-term fund rate to between 0% and 0.25%, a low level. as they go. The central bank also pledged to buy mortgage-backed securities and Treasuries, which support the housing finance market, but it began tapering those purchases in November.
  • 10-year treasury bonds. Mortgage rates are moving in leaps and bounds with 10-year government treasury bond yields. Returns fell below 1% for the first time in March 2020 and have been rising ever since. On average, there is usually a 1.8-point “difference” between Treasury yields and benchmark mortgage rates.
  • the broader economy. Unemployment rates and changes in GDP are important indicators of the overall health of an economy. When employment and GDP growth are low, it means the economy is weak, which can lead to lower interest rates. Thanks to the pandemic, unemployment levels reached an all-time high early last year and have yet to recover. GDP also took a hit, and while it rebounded somewhat, there is still plenty of room for improvement.

Tips for getting 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 will depend on both personal financial factors and market conditions.

Check your credit score and credit report. Mistakes or other red flags may lower your credit score. The borrowers with the highest credit scores will get the best rates, so checking your credit report before beginning the home search process is key. Taking steps to fix mistakes will help increase your score. If you have high credit card balances, paying them off can also provide a quick payment.

Save money for a big down payment. This will lower the loan-to-value ratio, which means the amount of home price the lender has to finance. A lower permanent value of the loan usually translates to a lower mortgage rate. Lenders also want to see money that has been held in an account for at least 60 days. It tells the lender that you have the money to finance the purchase of the home.

Shop for the best price. Do not accept the first interest rate that the lender offers you. Check with at least three different lenders to see who offers the lowest interest. Also consider different types of lenders, such as credit unions and online lenders as well as traditional banks.

Also. Take your time to learn about the different types of loans. While a 30-year mortgage is the most common type of mortgage, consider a short-term loan such as a 15-year loan or adjustable mortgage. These types of loans often come at a lower rate than a traditional 30-year mortgage. Compare everyone’s costs to see which best suits your needs and financial situation. Government loans—such as those backed by the Federal Housing Authority, the Department of Veterans Affairs, and the Department of Agriculture—can be more affordable options for those who qualify.

Finally, fix your price. Locking in your rate once you’ve found the right rate, loan product, and lender will help ensure that your mortgage rate doesn’t increase before the loan closes.

Our Mortgage Rate Methodology

Daily Cash Mortgage rates show the average rate offered by more than 8000 lenders across the United States, with the latest working day rates available. Today, we’re showing interest rates for Thursday, January 6, 2021. Our rates reflect what a typical borrower with a credit score of 700 would expect to pay for a home purchase loan right now. These prices are shown to people who have placed at least 20% and include discount points.

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