Current Mortgage Rates Trends
Updated January 20, 2022
- 30-Year Fixed Rate 3.670%; APR of 3.740%.
- 15-Year Fixed Rate 3.020%; APR of 3.160%.
- 5/1 Adjustable-Rate Mortgage Rate 2.780%; APR of 4.070%.
Current mortgage rates
According to the latest survey of the nation’s largest mortgage lenders, these are the current average rates for a 30-year, 15-year fixed mortgage and 5/1 adjustable-rate mortgage (ARM) rates among others.
|30-Year Fixed Rate||3.670%||3.740%|
|30-Year FHA Rate||3.190%||4.030%|
|30-Year VA Rate||3.290%||3.420%|
|30-Year Fixed Jumbo Rate||3.680%||3.750%|
|20-Year Fixed Rate||3.570%||3.650%|
|15-Year Fixed Rate||3.020%||3.160%|
|15-Year Fixed Jumbo Rate||3.080%||3.130%|
|5/1 ARM Rate||2.780%||4.070%|
|5/1 ARM Jumbo Rate||2.620%||3.670%|
|7/1 ARM Rate||2.930%||3.980%|
|7/1 ARM Jumbo Rate||2.790%||3.900%|
|10/1 ARM Rate||3.160%||4.040%|
Rates data as of 1/20/2022
How Coronavirus affects mortgage rates
The COVID-19 pandemic has done a number on the economy — job loss and other hardships have caused financial instability for a lot of people. Coronavirus has also had a drastic effect on mortgage rates across the country. Unlike the toll the pandemic has taken on the economy, though, the pandemic has affected interest rates in a positive way for consumers. As of early July, national mortgage rates hit a new record low, with economists speculating that 30-year rates could drop below 3% later this year.
As of July 2, multiple key mortgage rates had dropped, and the average rate for 30-year fixed mortgages was at 3.07%, down six basis points from the week prior. As rates have decreased, though, some lenders have increased credit score requirements in efforts to reduce their risk, which may make things a bit tougher for borrowers with less than excellent credit.
Experts expect the rates to continue to shift well into 2021, and they expect the best mortgage rates we’re seeing currently will increase over time as the world slowly adjusts to a new normal. The fluctuating market and potential for increased interest rates in the near future mean that you might want to take advantage of the mortgage rates today if you’ve been considering whether to invest in property. As an added bonus, more housing stock is being added as the country slowly reopens, and the new influx should slowly help to create the demand that has been missing over the last few months. In response, mortgage rates will continue to reflect economic activity.
Mortgage Rates Trends
In this graph:
On , the APR was for the 30-year fixed rate, for the 15-year fixed rate, and for the 5/1 adjustable-rate mortgage rate. These rates are updated almost every day based on Bankrate’s national survey of mortgage lenders. Toggle between the three rates on the graph and compare today’s rates to what they looked like in the past days.
*3% if you qualify for its Affordable Loan Solution, but otherwise 5%.
Interest.com chooses to highlight mortgage lenders that offer the best overall experience to borrowers. To determine the best mortgage lenders, we compare many factors, including APR, minimum credit scores, borrower requirements and overall availability.
The lenders featured on our site offer competitive interest rates and a lineup of products for a diverse range of borrowers. Each one serves a variety of U.S. states with either regional or national lending capability. They’re established mortgage lenders offering sophisticated online resources and convenient customer service.
Our goal is to provide reliable and timely information so you can make the best financial decisions for your lifestyle and wallet. We adhere to strict standards to ensure our work is always accurate, and our writers do not receive direct advertiser compensation or influence.
Interest’s guide to finding the right mortgage for you
A mortgage is a loan given to a homebuyer in order to purchase a new home or refinance an existing home loan. Homebuyers must apply for a mortgage with a bank or government organization, and the annual percentage rate (APR) they receive depends on individual factors like their credit score. If the homebuyer can’t pay his or her mortgage before the balance is settled, the lender will repossess the home. Mortgage payments are typically due once a month over a series of years, known as the loan term, until the loan balance and accrued interest is paid in full or until the home is resold.
Types of mortgages
The three main types of mortgages are conventional, government insured and non-conforming home loans.
Conventional mortgages include any home loan that isn’t backed by a government organization. These loans tend to require higher credit scores and larger down payments since the lender risks losing money if the buyer defaults on the loan.
- Fixed-rate mortgages have locked-in interest rates throughout the life of the loan. No matter how interest rates rise or drop, your interest rate will remain the same. For example, if you finance a home at an interest rate of 3.500%, but rates go up to 4.000%, your rate will remain at 3.500% interest.
- Adjustable-rate mortgages, or ARM loans, have interest rates that can fluctuate. Typically, the interest rate will be set for a certain number of years, and begin to change once that time is up. For example, a 5/1 ARM will feature a locked-in rate for five years, with the interest rate changing every year after that.
The U.S. government insures certain types of mortgages to make it easier for borrowers to get approved. This means that if a borrower defaults on their loan, the government is responsible for covering the costs to the lender. The three main types of government-backed loans are FHA loans, VA loans and USDA loans.
- FHA home loans are offered through the Federal Housing Administration, and require only 3.5% down. Aimed at assisting first-time or low-income buyers, FHA loans include a minimum credit score requirement of 580 and may require mortgage insurance.
- USDA home loans are offered though the USDA’s Rural Development program, and provide low-interest mortgages to buyers in eligible rural and suburban areas. Borrowers can qualify for USDA loans with no down payment, though they may have to pay mortgage insurance.
- VA home loans are secured by Veterans Affairs, and have no down payment or mortgage insurance requirement. They’re only available to veterans, active-duty military, or military spouses who are deemed eligible by the VA.
Non-conforming mortgages, often called jumbo loans, don’t abide by the guidelines set by the Federal Housing Finance Agency. Because they don’t meet these guidelines, lenders can’t resell them to Freddie Mac and Fannie Mae, which are the governmental agencies that provide a secondary mortgage market for lenders. Since they can’t be resold, non-conforming mortgages are more difficult to qualify for and require higher credit and higher down payment. A major benefit of non-conforming mortgages is that you can receive a bigger loan if you’re looking a home in a high-cost area. In 2020, mortgages of more than $510,400 are considered non-conforming.
Compare Mortgage Terms
15-year fixed rate vs 30-year fixed rate mortgages
Choosing between a 15-year mortgage and a 30-year mortgage is usually a question of what loan amount you can afford. Obviously, a 15-year loan lets you pay off your loan faster at a lower interest rate. However, your monthly mortgage payment will be significantly higher. With a 30-year mortgage, you’ll pay a lot more money in the long run thanks to interest, but your monthly payments will be lower. If you can afford a 15-year mortgage, it’s usually the better option. Ask potential lenders for 15-year and 30-year quotes, compare the differences and calculate what you’ll be able to pay.
Compare the two using our 15-year vs. 30-year mortgage calculator.
5/1 ARM vs 30-year fixed rate mortgage
A 5/1 adjustable-rate mortgage has a fixed interest rate for the first five years, followed by an adjustable-rate for the remaining 25 years. That makes 5/1 mortgages a little more attractive than regular ARMs, since you know your rate won’t increase for at least five years. But it’s still risky since your rate could still skyrocket after the initial rate period ends. Of course, if you only plan to live in a home for five years or less, a 5/1 might be a good option. Meanwhile, 30-year fixed-rate mortgages won’t fluctuate at all. Bottom line, 5/1 ARMs are best suited for times when interest rates are expected to drop, or you don’t intend to stay in your home for more than five years.
10/1 ARM vs 5/1 ARM
The 10/1 adjustable-rate mortgage is just like a 5/1 ARM, but the fixed-rate extends to the first 10 years instead of five. That means your rate will fluctuate during the final 20 years of your 30-year mortgage. A 10/1 ARM is good if rates are high when you buy a home (and you expect them to go down after your fixed-rate expires), or if you know you’ll live in the home for less than 10 years. If you’re confident you’ll move in less than five years, a 5/1 ARM will usually mean a better rate in the short-term.
How does a mortgage work?
A mortgage is the binding agreement of a loan to buy a home. The mortgage is between the lender and the homeowner. In order to own the home, the borrower agrees to a monthly payment over the payment period agreed upon. Once the homeowner pays the mortgage in full the lender will grant deed or ownership.
Your monthly mortgage payment includes a percentage of your loan principal, interest, property taxes and insurance. Keep in mind, your mortgage will include your annual percentage rate (APR) to include a full breakdown of your lender fees and other costs included in your payments.
Most mortgage loans last between 10, 15 or 30 years and are either fixed-rate or adjustable-rate. If you choose a fixed-rate mortgage, your interest rate will stay the same throughout your loan. But if your mortgage is adjustable, your mortgage’s interest rate will depend on the market each year, meaning that your monthly payment could vary.
The consequences of not repaying your mortgage loan can be pretty stiff. If a homeowner doesn’t make payments on their mortgage, they could face late fees or other credit penalties. The mortgage also gives the lender the right to take possession of and sell the property to someone else, and the homeowner can face other charges from the lender. All in all, mortgages are a great, affordable option for purchasing a home without the worry of paying in full upfront.
What if you want to refinance?
A refinance is a loan that pays off the existing mortgage balance, then resumes payment under the new loan amount and term. Refinancing can be a smart option for homeowners looking to lower their existing interest rate or monthly payments. It is crucial for homeowners to understand the details of their primary mortgage as well as the refinance terms, plus any associated costs or fees, to make sure the decision makes financial sense.*
* By refinancing your existing loan, your total finance charges may be higher over the life of the loan.
Compare the most recent rates in our mortgage refinance page.
How are mortgage rates determined?
Mortgage rates are determined based on your credit score, the loan-to-value ratio of the home and the type of loan you’re applying for. In general, homebuyers with good credit scores of 740 or higher can expect lower interest rates and more options, including jumbo loans. Your rate will also be calculated based on the loan-to-value ratio, which considers the percentage of the home’s value that you’re paying through the loan. A loan-to-value ratio higher than 80% could be considered risky for lenders and lead to higher interest rates for the home buyer.
A good mortgage rate should fall within the industry benchmarks developed by Freddie Mae and Fannie Mac. However, keep in mind that these interest rates are an average based on users with high credit scores. Currently, a good interest rate will be about 3% to 3.5%, though these rates are historically low.
The Federal Reserve affects mortgage rates by raising and lowering the federal funds rate. Currently, the federal funds rate is low and the Federal Reserve has also injected more money into the MBS market, making mortgage rates lower for the average consumer.
How do I choose a mortgage lender?
As you shop for a lender, your real estate agent may have a few preferred choices, but it all comes down to what works best for you. The Federal Trade Commission (FTC) recommends getting quotes from different lenders and calling several times to get the best rates. Be sure to ask about the annual percentage rate (APR) and interest rates.
You’ll also want to keep a note of any fees required by the lender. Some common costs may include appraisal and processing fees. Be sure to ask about any fees that are unfamiliar and if they can be negotiated.
Buying a home is a big step and your mortgage lender plays an important role in the process. Don’t hesitate to read customer reviews and ask any questions that will make you feel comfortable working with them. Most importantly, read any documentation and the fine print so there aren’t any unforeseen fees or expectations. The Consumer Financial Protection Bureau has a loan estimate explainer to help you double-check all the details agreed upon between you and your lender.
How long should my mortgage be?
When applying for a mortgage, the type of loan will usually determine how long you’ll have your mortgage. For instance, you can choose from conventional mortgages on 15-year and 30-year terms. With a shorter term, you’ll pay a higher monthly rate, though your total interest will be lower than a 30-year loan. If you have a high monthly income as well as long-term stability for the foreseeable future, a 15-year loan would make sense to save money in the long-term. However, a 30-year term would be better for someone who needs to make lower monthly payments.
How much can I borrow?
The amount you can borrow for your mortgage should depend on your annual income, lending terms, interest rate, and monthly debt. By good rule of thumb, you should only be spending 25% to 30% of your monthly income on housing each month.
The Federal Housing Administration and Fannie Mae set loan limits for conventional loans. By law, all mortgage loans have a maximum limit of 115% of median home prices. Currently, the loan limit for a single unit within the United States is $510,400. For high-cost areas, the limit is increased to $765,600 for a single unit.
Government-insured loans such as FHA have similar limits based on current housing prices. At the end of 2019, the FHA limit was increased to $331,760 in most parts of the country. VA loan limits were eliminated in early 2020.
What is the difference between APR and interest rate?
There’s a big difference between the annual percentage rate (APR) and the interest rate. These terms can be confusing during the home buying process, though, because both are expressed as a percentage and impact how much you’ll be paying annually on your mortgage.
Here’s the big difference — your APR is a breakdown of everything you’re paying during the home buying process, including the interest rate and any additional fees. APRs may also include closing costs and other lender costs. APRs are usually higher than interest rates because it’s a breakdown of all fees you’ll be paying, while the interest rate is solely the overall cost of the loan you’ll pay.
The APR is determined by the mortgage lender and includes both the interest rate and the various fees tacked on. It’s the total amount you’re paying for borrowing the money.
On the other hand, the interest rate is the rate, without fees, that you’re being charged for the loan. The interest rate is based on factors including the loan amount you agree to pay and your credit score. Interest rates can also vary depending on the type of loan you choose and your state, along with some other factors.
The impact of a 0.1% change in your mortgage rate
You already know that choosing the right kind of mortgage is crucial to your financial future. What may not be readily apparent, though, is how fluctuations in your rate can make a major impact. Let’s take a look at what would happen if a 30-year fixed-rate mortgage of $350,000 went up by just 0.1%.
Using a mortgage rate calculator, you can see your monthly mortgage payment would increase from $1,773 to $1,794 if your rate increased from 4.5% to 4.6%. That doesn’t seem so bad, right?
However, look at the total interest you’ll accrue and pay during the life of the 30-year mortgage. That tiny 0.1% increase in your rate is the difference between $288,422 in interest payments and $295,929. And if your fixed-rate mortgage was an ARM instead, that gap could be significantly higher — tens of thousands higher. No matter what kind of mortgage you get, or which lender you choose, finding the best possible rate is key to figuring out how much house you can afford.
Best mortgage lenders
|Lender||Best For||Min. Credit Score||Min. Down Payment||States Served|
|Citizens Bank||Online tools||620||3.5%||13|
|TD Bank||Government loans||700||3%||19|
|Bank of America||Discounts for existing customers||620||3% – 5%*||50|
|Quicken Loans||Flexible terms||580||3.5%||50|
|New American Funding||No minimum payment||620||0%||48|
|J.G. Wentworth||Low-income options||580||3%||45|
|USAA Mortgage||Customer service||620||0%||50|
|SunTrust Mortgage||Diverse loan types||620||3%||50|
|Chase||Online mortgage tracking||620||3%||40|
The Final Word
The Coronavirus pandemic has caused significant reductions to mortgage rates as demand plummeted. With Americans sequestered in their homes, the market has stood still with no new properties, no new sales, and no new buyers. However, as the nation slowly begins to recover and return to work, we can expect to see new homes begin to hit the market. Unemployment remains at an all-time high, but renewed commerce should produce new buyers and continue to boost demand. As the weeks continue to pass, experts predict the market will slowly begin to rebound, and we will see mortgage rates rise in response as the country continues to recover.
State Mortgage Rates
- New Hampshire
- New Jersey
- New Mexico
- New York
- North Carolina
- North Dakota
- Rhode Island
- South Carolina
- South Dakota
- Washington, D.C.
- West Virginia