Current national mortgage and refinance rates, February 8th, 2022: Rates rise

Mortgage interest rates rose for all loan terms compared to a week ago, according to data compiled by Bankrate. Rates for 30-year fixed, 15-year fixed, 5/1 ARMs and jumbo loans increased.

Rates as of February 8, 2022.

The rates listed above are marketplace averages based on the assumptions here. Actual rates displayed within the site may vary. This story has been reviewed by Bill McGuire. All rate data accurate as of Tuesday, February 8th, 2022 at 7:30am.

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 interest rates

Current 30 year mortgage rate moves higher, +0.15%

The average rate for the benchmark 30-year fixed mortgage is 3.93 percent, an increase of 15 basis points over the last seven days. This time a month ago, the average rate on a 30-year fixed mortgage was lower, at 3.49 percent.

At the current average rate, you’ll pay a combined $468.24 per month in principal and interest for every $100k you borrow. That’s up $6.83 from what it would have been last week.

30-year mortgage vs. 15-year mortgage

Standard lending practices defer to the 30-year, fixed-rate mortgage as the go-to for most borrowers because it allows the borrower to scatter mortgage payments out over 30 years, keeping their monthly payment lower.

With a 15-year mortgage, however, borrowers are able to pay off their loan in half the time — if they’re able and willing to expand the amount of their monthly loan payment. The primary difference between qualifying for a 15-year versus a 30-year mortgage is that you’ll need a higher income and lower debt-to-income ratio to obtain the former because the monthly payments are loftier.

15-year fixed mortgage moves upward,+0.10%

The average rate you’ll pay for a 15-year fixed mortgage is 3.28 percent, up 10 basis points over the last week.

Monthly payments on a 15-year fixed mortgage at that rate will cost $435 per $100k borrowed. That’s obviously much higher than the monthly payment would be on a 30-year mortgage at that rate, 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 rapidly.

5/1 adjustable rate mortgage trends upward, +0.02%

The average rate on a 5/1 ARM is 2.85 percent, climbing 2 basis points over the last week.

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

Monthly payments on a 5/1 ARM at 2.85 percent would cost about $409 for each $100,000 borrowed over the initial five years, but could climb hundreds of dollars higher afterward, depending on the loan’s terms.

Jumbo loan interest rate moves up, +0.18%

The average rate for the benchmark jumbo mortgage is 3.95 percent, an increase of 18 basis points over the last seven days. Last month on the 8th, the average rate for jumbo mortgages was lesser, at 3.51 percent.

At today’s average rate, you’ll pay $468.24 per month in principal and interest for every $100k you borrow. Compared to last week, that’s $6.83 higher.

In summary: How mortgage rates have moved

  • 30-year fixed mortgage rate: 3.93%, up from 3.78% last week, +0.15
  • 15-year fixed mortgage rate: 3.28%, up from 3.18% last week, +0.10
  • 5/1 ARM mortgage rate: 2.85%, up from 2.83% last week, +0.02
  • Jumbo mortgage rate: 3.95%, up from 3.77% last week, +0.18

Mortgage refinance rates

30-year mortgage refinance rate increases, +0.23%

The average 30-year fixed-refinance rate is 3.99 percent, up 23 basis points from a week ago. A month ago, the average rate on a 30-year fixed refinance was lower, at 3.50 percent.

At the current average rate, you’ll pay $475.11 per month in principal and interest for every $100,000 you borrow. Compared with last week, that’s $13.70 higher.

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 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.

Is now a good time to buy a house?

There’s never a straightforward answer to this question. It always depends. Do you have a reliable income, a good credit score and money saved for a down payment and repairs? If you can answer all of those questions affirmatively, you’re ready to buy.

However, the pandemic has led to an even greater shortage of homes. That’s caused a bidding war and rising prices. Those trends mean it can be a frustrating market for buyers.

Keep reading:

Featured lenders for today, February 8, 2022

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