Current mortgage and refinance rates for February 25, 2022 – Rates still low

Mortgage interest rates were mixed this week, according to data compiled by Bankrate. See below for a breakdown of how different loan terms moved.

Rates as of February 25, 2022.

These rates are marketplace averages based on the assumptions shown here. Actual rates listed across the site may vary. This story has been reviewed by Bill McGuire. All rate data accurate as of Friday, February 25th, 2022 at 7:30 a.m.

>>Check out historical mortgage rate trends, from the 70s to today

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 increases, +0.06%

The average rate for a 30-year fixed mortgage is 4.25 percent, an increase of 6 basis points from a week ago. This time a month ago, the average rate on a 30-year fixed mortgage was lower, at 3.78 percent.

At the current average rate, you’ll pay principal and interest of $489.02 for every $100k you borrow. That’s an extra $6.98 compared with last week.

Use our mortgage calculator to calculate your monthly payments and see how much you’ll save by adding extra payments. The tool will also help you calculate how much interest you’ll fork up over the life of the loan.

15-year fixed mortgage trends down,-0.01%

The average rate for a 15-year fixed mortgage is 3.47 percent, down 1 basis point over the last seven days.

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

5/1 ARM rate flat for the week

The average rate on a 5/1 adjustable rate mortgageis 2.93 percent, unchanged 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 from time to time 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 considerably higher when the loan first adjusts, and thereafter.

Monthly payments on a 5/1 ARM at 2.93 percent would cost about $415 for each $100,000 borrowed over the initial five years, but could ratchet higher by hundreds of dollars afterward, depending on the loan’s terms.

Jumbo mortgage rate rises, +0.05%

The current average rate you’ll pay for jumbo mortgages is 4.25 percent, an increase of 5 basis points over the last seven days. This time a month ago, the average rate was lower, at 3.78 percent.

At the average rate today for a jumbo loan, you’ll pay a combined $489.02 per month in principal and interest for every $100k you borrow. Compared to last week, that’s $6.98 higher.

In summary: How interest rates have moved

  • 30-year fixed mortgage rate: 4.25%, up from 4.19% last week, +0.06
  • 15-year fixed mortgage rate: 3.47%, down from 3.48% last week, -0.01
  • 5/1 ARM mortgage rate: 2.93%, the same as last week
  • Jumbo mortgage rate: 4.25%, up from 4.20% last week, +0.05

Interested in refinancing? See mortgage refinance rates

30-year fixed-rate refinance advances, +0.01%

The average 30-year fixed-refinance rate is 4.21 percent, up 1 basis point from a week ago. A month ago, the average rate on a 30-year fixed refinance was lower, at 3.75 percent.

At the current average rate, you’ll pay $489.02 per month in principal and interest for every $100,000 you borrow. Compared with last week, that’s $6.98 higher.

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 mortgage terms

The 30-year fixed-rate mortgage is the most popular option for homeowners, and this type of loan has a number of advantages, including:

  • 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.

Use our mortgage calculator to approximate your monthly payments and see how much you’ll save by adding extra payments. The tool will also help you calculate how much interest you’ll pay over the life of your loan.

Keep reading:

Featured lenders for February 25, 2022

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