Today’s mortgage rates December 28, 2021: Despite a slight increase, rates are low for homebuyers

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Some major mortgage rates have gone up today, including the 15-year and 30-year fixed mortgage rates. We have also seen an increase in the average rate of mortgage loans with adjustable rate 5/1. If you are thinking of buying a home, maybe now is the time to lock in a fixed rate as they are still at all time lows. But as always, be sure to think about your personal goals and circumstances first before buying a home, and look for a lender who can best meet your needs.

30-year fixed rate mortgages

The 30-year average fixed mortgage interest rate is 3.24%, up 4 basis points from a week ago. (One basis point equals 0.01%.) Thirty-year fixed rate mortgages are the most commonly used loan term. A 30 year fixed rate mortgage will often have a higher interest rate than a 15 year fixed rate mortgage, but also a lower monthly payment. You won’t be able to pay off your home that quickly, and you’ll pay more interest over time, but a 30-year fixed mortgage is a good option if you’re looking to keep your monthly payment down.

15-year fixed rate mortgages

The average rate for a 15-year fixed-rate mortgage is 2.51%, which is an increase of 1 basis point from seven days ago. You will likely have a higher monthly payment with a 15-year fixed mortgage compared to a 30-year fixed mortgage, even if the interest rate and loan amount are the same. However, as long as you are able to afford the monthly payments, a 15-year loan has several advantages. 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 3.24%, an addition of 5 basis points from a week ago. With an ARM mortgage, you will typically get a lower interest rate than a 30-year fixed mortgage for the first five years. However, changes in the market could cause your interest rate to increase after this period, as stated in your loan terms. If you plan to sell or refinance your home before rates change, an adjustable rate mortgage may be right for you. But if it doesn’t, you could be forced to pay a significantly higher interest rate if market rates change.

Mortgage rate trends

We use data 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 nationwide:

Current average mortgage interest rates

Type of loan Interest rate A week ago Change
30-year fixed rate 3.24% 3.20% +0.04
15-year fixed rate 2.51% 2.50% +0.01
Giant 30-year mortgage rate 2.74% 2.74% NC
30-year mortgage refinancing rate 3.22% 3.16% +0.06

Updated December 28, 2021.

How To Shop For The Best Mortgage Rate

When you’re ready to apply for a loan, you can connect with 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. Specific mortgage rates will vary based on factors such as credit rating, down payment, debt-to-income ratio, and loan-to-value ratio. Typically, you want a higher credit score, larger down payment, lower DTI, and lower LTV to get a lower interest rate. The interest rate isn’t the only factor that affects the cost of your home – be sure to consider other costs like fees, closing costs, taxes, and points of call as well. Be sure to shop around with multiple lenders – for example, credit unions and online lenders in addition to local and state banks – to get a loan that’s right for you.

What is a good loan term?

An important consideration when choosing a mortgage loan is the length of the loan or the payment schedule. The most common mortgages are for 15 years and 30 years, although there are also mortgages for 10, 20 and 40 years. Mortgages are divided into fixed rate and variable rate mortgages. For fixed rate mortgages, interest rates are stable throughout the life of the loan. Unlike a fixed rate mortgage, the interest rates on a variable rate mortgage are only stable for a certain period of time (usually five, seven, or 10 years). After that, the rate adjusts annually based on the current market interest rate.

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. For those who plan to stay in a new home for the long term, fixed rate mortgages may be the best option. Fixed rate mortgages offer more stability over time compared to variable rate mortgages, but variable rate mortgages may offer lower interest rates upfront. If you don’t plan on keeping your new home for more than three to ten years, an adjustable rate mortgage might give you a better deal. The best loan term depends on the situation and the person’s goals, so be sure to think about what is important to you when choosing a mortgage.

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