Mortgage interest rates as of December 24, 2021: rates go down

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A variety of major mortgage rates have come down today. Average interest rates for 15-year fixed and 30-year mortgages have declined. The average rate for the most common type of variable rate mortgage, the 5/1 variable rate mortgage, has also declined. Although mortgage rates are constantly changing, they are quite low right now. For this reason, now is the perfect time for potential buyers to get a fixed rate. Before buying a home, don’t forget to think about your personal needs and financial situation, and look for several lenders to find the one that’s right for you.

30-year fixed rate mortgages

The 30-year fixed mortgage rate average is 3.19%, down 5 basis points from seven days ago. (One basis point equals 0.01%.) Thirty-year fixed rate mortgages are the most common loan term. A 30 year fixed rate mortgage will usually have a smaller monthly payment than a 15 year mortgage, but usually a higher interest rate. While you’ll pay more interest over time – you pay off your loan over a longer period – if you’re looking for a lower monthly payment, a 30-year fixed mortgage may be a good option.

15-year fixed rate mortgages

The average rate for a 15-year fixed-rate mortgage is 2.50%, down 2 basis points from seven days ago. Compared to a 30-year fixed mortgage, a 15-year fixed mortgage with the same loan value and the same interest rate will have a higher monthly payment. But a 15 year loan will usually be the best deal, if you are able to afford the monthly payments. You will usually get a lower interest rate and pay less interest overall because you pay off your mortgage much faster.

5/1 adjustable rate mortgages

A 5/1 ARM has an average rate of 3.18%, down 6 basis points from the same period last week. With an ARM mortgage, you will typically get a lower interest rate than a 30-year fixed mortgage for the first five years. However, as the rate adjusts to the market rate, you could end up paying more after this period, as described in your loan terms. For borrowers who are considering selling or refinancing their home before rates change, an adjustable rate mortgage may be a good option. Otherwise, changes in the market could dramatically increase your interest rate.

Mortgage rate trends

We use information collected by Bankrate, which is owned by the same parent company as CNET, to track daily mortgage rate trends. This table summarizes the average rates offered by lenders in the United States:

Average mortgage interest rates

Product Rate Last week Change
30 years fixed 3.19% 3.24% -0.05
15 years fixed 2.50% 2.52% -0.02
Giant 30-year mortgage rate 2.74% 2.74% NC
30-year mortgage refinancing rate 3.16% 3.21% -0.05

Prices as of December 24, 2021.

How to find personalized mortgage rates

When you’re ready to apply for a loan, you can contact a local mortgage broker or search online. In order to find the best home loan, you will need to consider your goals and current finances. Things that affect the mortgage rate you might get include: your credit rating, down payment, loan-to-value ratio, and debt-to-income ratio. Typically, you want a higher credit score, larger down payment, lower DTI, and lower LTV to get a lower interest rate. Besides the interest rate, factors such as closing costs, fees, points of call, and taxes may also be factored into the cost of your home. Be sure to talk to multiple lenders – including local and state banks, credit unions, and online lenders – and a comparator to find the best loan for you.

How does the term of the loan affect my mortgage?

An important factor to consider when choosing a mortgage loan is the length of the loan or the payment schedule. The most commonly offered loan terms are 15 years and 30 years, although you can also find 10, 20 and 40 year mortgages. Mortgages are divided into fixed rate and variable rate mortgages. The interest rates for a fixed rate mortgage are set for the term of the loan. Unlike a fixed rate mortgage, the interest rates on a variable rate mortgage are only fixed for a certain period of time (usually five, seven, or 10 years). After that, the rate changes every year based on the current interest rate in the market.

When choosing between a fixed rate mortgage and an adjustable rate mortgage, you need to consider how long you plan to stay in your home. Fixed rate mortgages might be more suitable if you plan to stay in a house for a period of time. Fixed rate mortgages offer more stability over time than variable rate mortgages, but variable rate mortgages can sometimes offer lower interest rates initially. However, you might get a better deal with an adjustable rate mortgage if you only plan to keep your home for a few years. Generally, there is no better loan term; it all depends on your goals and your current financial situation. Make sure you do your research and know your own priorities when choosing a mortgage.

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