Mortgage rates—which have been rising in fits and starts—lurched upward again, bringing the 30- and 15-year rates to new multi-year highs.
The average rate offered to homebuyers using a conventional 30-year fixed mortgage jolted to 5.41% from 5.22% the previous business day, while the average rate for the 15-year jumped to 4.46% from 4.32% the previous business day. Both hit their highest levels in more than two years. (Our daily mortgage rate data only goes back to April 2021, but our data on yearly highs and lows dates back to 2020, so we know rates hadn’t been higher in 2020.)
Fixed mortgage rates tend to track the direction of 10-year Treasury yields, which usually rise with heightened inflation fears (and fall when those fears subside). Despite some intraday swings, yields have generally been up in recent days because a government report showing a growing job market makes it more likely that the Federal Reserve will go higher with its benchmark interest rate to fight soaring inflation, analysts said. Speeches by Fed officials this week only reinforced that impression. Yields have been on the rise this year as inflation has heated up and the Fed’s efforts to cool the economy have unfolded.
During the pandemic, relatively low rates bolstered buying power, allowing house hunters to buy more expensive homes with the same monthly budget and helping to fuel a fiercely competitive residential real estate boom characterized by rapidly rising prices. But now that interest rates have spiked, the cost is increasingly putting homes out of reach for prospective buyers. While rates are still relatively low by historic standards—at the start of the 1990s, the average 30-year mortgage was around 10%, according to Freddie Mac data—both the 30-year and 15-year are now about 2 percentage points higher than their record lows of 2021.
Mortgage rates, like the rates on any loan, are going to depend on your credit score, with lower rates going to people with better scores, all else being equal. The rates shown reflect the average offered by more than 200 of the country’s top lenders, assuming the borrower has a FICO credit score of 700-759 (within the “good” or “very good” range) and a loan-to-value ratio of 80%. They also assume the borrower doesn’t purchase any mortgage or “discount” points. Borrowers pay these points, or upfront fees, to obtain a lower interest rate, spending more initially to save in the long run. Whether or not you should pay points depends on how long you plan to keep the loan. Here’s how to calculate that.
30-Year Mortgage Rates Jump
A 30-year fixed mortgage is by far the most common type of mortgage because it offers a consistent and relatively low monthly payment. (Shorter-term fixed mortgages have higher payments because the borrowed money is paid back more quickly.)
Besides conventional 30-year mortgages, some are backed by the Federal Housing Authority or the Department of Veterans Affairs. FHA loans offer borrowers with lower credit scores or a smaller down payment a better deal than they might otherwise get; VA loans let current or past members of the military and their families skip a down payment.
- 30-year fixed: The average rate rose to 5.41%, up from 5.22% the previous business day. A week ago, it was 5.26%. For every $100,000 borrowed, monthly payments would cost about $562.16, or $9.34 more than a week ago.
- 30-year fixed (FHA): The average rate rose to 5.38% from 5.23% the previous business day. A week ago, it was 5.13%. For every $100,000 borrowed, monthly payments would cost about $560.28, or $15.49 more than a week ago.
- 30-year fixed (VA): The average rate rose to 5.46% from 5.25% the previous business day. A week ago, it was 5.31%. For every $100,000 borrowed, monthly payments will cost about $565.28, or $9.35 more than a week ago.
All else being equal, a higher rate increases your monthly payment, but there are other parts of the equation. For example, if you know your monthly payment can’t be more than $2,000, you could get a $383,500 home at a 3.5% rate or a $366,500 home at a 4% rate. Both assume a 30-year loan, a 20% down payment, typical homeowners’ insurance costs, and property taxes. To do the math specific to your situation, use our mortgage calculator below.
15-Year Mortgage Rate Climbs
The major advantage of a 15-year fixed mortgage is that it offers a lower interest rate than the 30-year and you’re paying off your loan more quickly, so your total borrowing costs are far lower. But for the same reason—that the loan is paid back over a shorter time frame—the monthly payments will be higher.
- 15-year fixed: The average rate rose to 4.46%, up from 4.32% the previous business day. A week ago, it was 4.26%. For every $100,000 borrowed, monthly payments would cost about $762.95, or $10.17 more than a week ago.
Besides fixed-rate mortgages, there are adjustable-rate mortgages (ARMs), where rates change based on a benchmark index tied to Treasury bonds or other interest rates. Most adjustable-rate mortgages are actually hybrids, where the rate is fixed for a period of time and then adjusted periodically. For example, a common type of ARM is a 5/1 loan, which has a fixed rate for five years (the “5” in “5/1”) and is then adjusted every one year (the “1”).
Jumbo Mortgage Rates Rise
Jumbo loans, which allow you to borrow bigger amounts for more expensive properties, tend to have slightly higher interest rates than loans for more standard amounts. Jumbo means over the limit that Fannie Mae and Freddie Mac are willing to buy from lenders, and that limit went up in 2022. For a single-family home, it’s now $647,200 (except in Hawaii, Alaska, and a few federally designated high-cost markets, where the limit is $970,800).
- Jumbo 30-year fixed: The average rate rose to 4.67% from 4.63% the previous business day. A week ago, it was 4.79%. For every $100,000 borrowed, monthly payments would cost about $516.84, or $7.22 less than a week ago.
- Jumbo 15-year fixed: The average rate rose to 4.40% from 4.27% the previous business day. A week ago, it was also 4.27%. For every $100,000 borrowed, monthly payments would cost about $759.89, or $6.60 more than a week ago.
Refinance Rates Surge
Refinancing an existing mortgage tends to be slightly more expensive than getting a new one, especially in a low-rate environment.
- 30-year fixed: The average rate to refinance rose to 5.51% from 5.33% the previous business day. A week ago, it was 5.35%. For every $100,000 borrowed, monthly payments would cost about $568.42, or $10.01 more than a week ago.
- 15-year fixed: The average rate to refinance rose to 4.57% from 4.44% the previous business day. A week ago, it was 4.37%. For every $100,000 borrowed, monthly payments would cost about $768.58, or $10.21 more than a week ago.
Our rates for “today” reflect national averages provided by more than 200 of the country's top lenders one business day ago, and the “previous” is the rate provided the business day before that. Similarly, the week earlier references compare the data from five business days earlier (so bank holidays are excluded.) The rates assume a loan-to-value ratio of 80% and a borrower with a FICO credit score of 700 to 759—within the “good” to “very good” range. They’re representative of the rates customers would see in actual quotes from lenders, based on their qualifications, and may vary from advertised teaser rates.
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