Today’s mortgage and refinance rates, February 18th, 2022 – Rates rise

Mortgage interest rates jumped for all types of loans 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 moved higher.

Rates accurate as of February 18, 2022.

The rates listed here are marketplace averages based on the assumptions shown here. Actual rates available across the site may vary. This story has been reviewed by Bill McGuire. All rate data accurate as of Friday, February 18th, 2022 at 7:30 a.m.

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 for home purchase

Today’s 30-year mortgage rate trends higher, +0.20%

The average rate for a 30-year fixed mortgage is 4.19 percent, an increase of 20 basis points over the last seven days. A month ago, the average rate on a 30-year fixed mortgage was lower, at 3.67 percent.

At the current average rate, you’ll pay a combined $482.04 per month in principal and interest for every $100,000 you borrow. That’s an extra $6.93 compared with last week.

15-year mortgage trends higher,+0.15%

The average 15-year fixed-mortgage rate is 3.48 percent, up 15 basis points from a week ago.

Monthly payments on a 15-year fixed mortgage at that rate will cost roughly $441 per $100,000 borrowed. That may squeeze your monthly budget than a 30-year mortgage 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 faster.

5/1 adjustable rate mortgage moves upward, +0.07%

The average rate on a 5/1 adjustable rate mortgageis 2.93 percent, ticking up 7 basis points from a week ago.

Adjustable-rate mortgages, or ARMs, are home loans 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 loans. These loan types are best for those who expect to sell or refinance before the first or second adjustment. Rates could be substantially 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 climb hundreds of dollars higher afterward, depending on the loan’s terms.

Jumbo loan interest rate moves upward, +0.20%

The average jumbo mortgage rate is 4.20 percent, up 20 basis points over the last seven days. This time a month ago, the average rate was below that, at 3.68 percent.

At today’s average jumbo rate, you’ll pay $482.04 per month in principal and interest for every $100k you borrow. That’s $6.93 higher compared with last week.

In summary: How mortgage rates have moved over the past week

  • 30-year fixed mortgage rate: 4.19%, up from 3.99% last week, +0.20
  • 15-year fixed mortgage rate: 3.48%, up from 3.33% last week, +0.15
  • 5/1 ARM mortgage rate: 2.93%, up from 2.86% last week, +0.07
  • Jumbo mortgage rate: 4.20%, up from 4.00% last week, +0.20

Interested in refinancing? See mortgage refinance rates

Current 30 year mortgage refinance rate increases, +0.18%

The average 30-year fixed-refinance rate is 4.20 percent, up 18 basis points from a week ago. A month ago, the average rate on a 30-year fixed refinance was lower, at 3.65 percent.

At the current average rate, you’ll pay $482.04 per month in principal and interest for every $100,000 you borrow. That’s an increase of $6.93 over what you would have paid 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 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.

When to lock your mortgage rate

A rate lock guarantees your interest rate for a specified period of time. It’s common for lenders to offer 30-day rate locks for a fee or to include the price of the rate lock into your loan. Some mortgage lenders will lock rates for longer periods, even exceeding 60 days, but those locks can be pricey. In today’s unstable market, some lenders will lock an interest rate for just two weeks to avoid unnecessary risk.

The benefit of a rate lock is that if interest rates rise, you’re locked into the guaranteed rate. Some lenders have a floating-rate lock option, which allows you to get a lower rate if interest rates fall before you close your loan. In a falling rate environment, a float-down lock could be worth the cost. Because mortgage rates are not predictable, there’s no guarantee that rates will stay where they are from week to week or even day to day. So, if you can lock in a low rate, then you should do so rather than gamble on interest rates falling even lower.

Remember: During the pandemic, all aspects of real estate and mortgage closings are taking much longer than usual. Expect the closing on a new mortgage to take at least 60 days, with refinancing taking at least a month.

What comes next:

Featured lenders for today, February 18, 2022

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