Compare today’s mortgage and refinance rates, March 7, 2022

Mortgage rates sunk across the board from a week ago, according to data compiled by Bankrate. Rates for 30-year fixed, 15-year fixed, 5/1 ARMs and jumbo loans all dropped.

Rates as of March 7, 2022.

The rates listed above are averages based on the assumptions shown here. Actual rates available on-site may vary. This story has been reviewed by Bill McGuire. All rate data accurate as of Monday, March 7th, 2022 at 7:30 a.m.

>>See historical mortgage rate trends

You can save thousands of dollars over the life of your mortgage by getting multiple offers. “It is so important to shop around,” says Greg McBride, CFA, Bankrate chief financial analyst. “Not everyone offers the same price, and some lenders may have motivation to be very competitive on price.”

Mortgage rates

Today’s 30-year mortgage rate dips, -0.15%

The average rate for a 30-year fixed mortgage is 4.10 percent, down 15 basis points over the last week. This time a month ago, the average rate on a 30-year fixed mortgage was lower, at 3.95 percent.

At the current average rate, you’ll pay a combined $482.04 per month in principal and interest for every $100k you borrow. That represents a decline of $6.98 over what it would have been last week.

15-year mortgage rate eases,-0.07%

The average rate for the benchmark 15-year fixed mortgage is 3.40 percent, down 7 basis points since the same time last week.

Monthly payments on a 15-year fixed mortgage at that rate will cost approximately $441 per $100k borrowed. The bigger payment may be a little harder to find room for in your monthly budget than a 30-year mortgage payment would, but it comes with some big advantages: You’ll come out several thousand dollars ahead over the life of the loan in total interest paid and build equity much more quickly.

5/1 adjustable rate mortgage retreats, -0.02%

The average rate on a 5/1 adjustable rate mortgageis 2.92 percent, ticking down 2 basis points over the last 7 days.

Adjustable-rate mortgages, or ARMs, are mortgage terms that come with a floating interest rate. In other words, the interest rate can change periodically throughout the life of the loan, unlike fixed-rate mortgages. These types of loans are best for people who expect to refinance or sell before the first or second adjustment. Rates could be much higher when the loan first adjusts, and thereafter.

Monthly payments on a 5/1 ARM at 2.92 percent would cost about $415 for each $100,000 borrowed over the initial five years, but could increase by hundreds of dollars afterward, depending on the loan’s terms.

Jumbo mortgage slides, -0.17%

is 4.09 percent, down 17 basis points since the same time last week. This time a month ago, the average rate on a jumbo mortgage was lower, at 3.97 percent.

At today’s average rate, you’ll pay a combined $482.04 per month in principal and interest for every $100,000 you borrow. That represents a decline of $6.98 over what it would have been last week.

Rate review: How mortgage interest rates have changed

  • 30-year fixed mortgage rate: 4.10%, down from 4.25% last week, -0.15
  • 15-year fixed mortgage rate: 3.40%, down from 3.47% last week, -0.07
  • 5/1 ARM mortgage rate: 2.92%, down from 2.94% last week, -0.02
  • Jumbo mortgage rate: 4.09%, down from 4.26% last week, -0.17

Refinance rates

30-year fixed-rate refinance eases, –0.13%

The average 30-year fixed-refinance rate is 4.08 percent, down 13 basis points since the same time last week. A month ago, the average rate on a 30-year fixed refinance was lower, at 3.99 percent.

At the current average rate, you’ll pay $475.11 per month in principal and interest for every $100,000 you borrow. That’s $13.91 lower, compared with last week.

Rate trends: Where are mortgage rates headed?

Mortgage rates plunged early in the pandemic and scraped record lows — below 3 percent — at the start of 2021. The new year, however, has been characterized by rising rates. The days of sub-3 percent mortgage interest on the 30-year fixed are behind us, and many experts think the average rate on this loan will be 3.5 to 4 percent by the end of 2022. That’s still great by historical standards though. The ultra-low rates of 2020 and 2021 were an anomaly, but even 4 percent is a deal in the scheme of things.

“Mortgage rates continue to surge, as they have since the beginning of the year, as the outlook takes shape for Fed rate hikes that are sooner and faster than previously expected,” McBride says. “Mortgage rates are still well below 4 percent but in an environment of already sky-high home prices, more would-be homebuyers are priced out with each move higher in mortgage rates.”

Comparing different mortgage terms

The 30-year fixed-rate mortgage is the most popular loan for homeowners. This mortgage has a number of advantages. Among them:

  • Lower monthly payment: Compared to a shorter term, such as 15 years, the 30-year mortgage offers lower payments spread over time.
  • Stability: With a 30-year mortgage, you lock in a consistent principal and interest payment. Because of the predictability, you can plan your housing expenses for the long term. Remember: Your monthly housing payment can change if your homeowners insurance and property taxes go up or, less likely, down.
  • Buying power: With lower payments, you can qualify for a larger loan amount and a more expensive home.
  • Flexibility: Lower monthly payments can free up some of your monthly budget for other goals, like saving for emergencies, retirement, college tuition or home repairs and maintenance.
  • Strategic use of debt: Some argue that Americans focus too much on paying down their mortgages rather than adding to their retirement accounts. A 30-year fixed mortgage with a smaller monthly payment can allow you to save more for retirement.

That said, shorter term loans have gained popularity as rates have been historically low. Although they have higher monthly payments compared to 30-year mortgages, there are some big benefits if you can afford the upfront costs. Shorter-term loans can help you achieve:

  • Greatly reduced interest costs: Because you pay off the loan faster, you’ll be able to pay less interest overall.
  • Lower interest rate: On top of less time for that interest to compound, most lenders price shorter-term mortgages with lower rates.
  • Build equity faster: The faster you pay off your mortgage, the faster you’ll own value in your home outright. That’s especially handy if you want to borrow against your property to fund other spending.
  • Debt-free sooner: A shorter-term mortgage means you’ll own your house free and clear sooner than you would with a longer-term loan.

How do mortgage rates affect homebuyers?

In this housing boom, mortgage rates have been a mixed bag for buyers. Low rates give borrowers more buying power. A $300,000 loan at 4 percent equates to a monthly payment of $1,432. If rates fall to 3 percent, the payment plunges to $1,265.

However, that sort of decline also can help push up home prices — and values indeed have jumped in recent months.

Here’s an example to show how soaring home prices and plunging mortgage rates can have offsetting effects. Let’s say you chose not to buy a $300,000 home a year ago, when the 30-year mortgage rate was around 3.75 percent. Your 20 percent down payment would’ve been $60,000 and your monthly payment would’ve been $1,111.

The price of the same house has jumped to $335,000 today. However, you can get a 30-year mortgage at 3 percent. As a result, your monthly payment rises only slightly, to $1,130. However, you’ll have to come up with an extra $7,000 to make a 20 percent down payment.

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Today’s featured lenders, March 7, 2022

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