Today’s Mortgage Rates for July 26, 2022: Rates Decreased

A few key mortgage rates sank today. While average 15-year fixed mortgage rates were steady, average interest rates on 30-year fixed mortgages retracted. We also saw a shrinking in the average rate of 5/1 adjustable-rate mortgages.

Mortgage rates have been rather consistently going up since the start of this year, and are expected to climb throughout 2022.

Of course, interest rates are dynamic and unpredictable — at least on a daily or weekly basis — as they respond to a wide variety of economic factors. At the moment, inflation and the federal funds rate are particularly influential. The Federal Reserve has increased interest rates three times this year and has signaled its intention to hike rates again to try to contain inflation.

That will likely translate into higher mortgage rates and, for prospective borrowers, steeper monthly mortgage payments. As such, homebuyers may have better luck locking in a lower mortgage interest rate sooner than later. It’s always a good idea to interview multiple lenders to compare rates and fees to find the best mortgage for your specific situation.

30-year fixed-rate mortgages

The average interest rate for a standard 30-year fixed mortgage is 5.71%, which is a decline of 2 basis points from one week ago. (A basis point is equivalent to 0.01%.) Thirty-year fixed mortgages are the most common loan term.

A 30-year fixed mortgage will typically have a higher interest rate than a 15-year fixed rate mortgage — but also a lower monthly payment. Although you’ll pay more interest over time — you’re paying off your loan over a longer timeframe — 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 mortgage is 4.92%, which is the same rate compared to a week ago. Compared to a 30-year fixed mortgage, a 15-year fixed mortgage with the same loan value and interest rate will have a bigger monthly payment.

However, if you’re able to afford the monthly payments, there are several benefits to a 15-year loan. These include typically being able to get a lower interest rate, paying off your mortgage sooner, and paying less total interest in the long run.

5/1 adjustable-rate mortgages

A 5/1 ARM has an average rate of 4.19%, a slide of 2 basis points from seven days ago. With an adjustable-rate mortgage mortgage, you’ll typically get a lower interest rate than a 30-year fixed mortgage for the first five years.

However, you might end up paying more after that time, depending on the terms of your loan and how the rate shifts with the market rate. For borrowers who plan to sell or refinance their house before the rate changes, an adjustable-rate mortgage could be a good option. But if that’s not the case, you might be on the hook for a much higher interest rate if the market rates shift.

Mortgage rate trends

Though mortgage rates were historically low at the beginning of 2022, they have been increasing somewhat steadily since then.

The Federal Reserve recently raised interest rates by 0.75 percentage points — the highest rate increase since 1994 — in an attempt to curb record-high inflation. As a general rule, when inflation is low, mortgage rates tend to be lower. When inflation is high, rates tend to be higher.

Though the Fed does not directly set mortgage rates, the central bank’s policy actions influence how much you pay to finance your home loan. And the Fed has signaled it will continue to raise rates over the course of this year. So, if you’re looking to buy a house in 2022, expect mortgage rates to generally increase as the year goes on.

We use rates collected by Bankrate, which is owned by the same parent company as CNET, to track changes in these daily rates. This table summarizes the average rates offered by lenders across the US:

Current average mortgage interest rates

Loan type

Interest rate

A week ago

Change
30-year fixed rate 5.71% 5.73% -0.02
15-year fixed rate 4.92% 4.92% N/C
30-year jumbo mortgage rate 5.67% 5.68% -0.01
30-year mortgage refinance rate 5.68% 5.70% -0.02

Updated on July 26, 2022.

How to find personalized mortgage rates

To find a personalized mortgage rate, speak to your local mortgage broker or use an online mortgage service. When researching home mortgage rates, think about your goals and current financial situation.

Things that affect what mortgage interest rate you might get include: your credit score, down payment, loan-to-value ratio and your debt-to-income ratio. Generally, you want a higher credit score, a larger down payment, a lower DTI and a 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 also consider other factors such as fees, closing costs, taxes and discount points.

Be sure to shop around with multiple lenders — such as credit unions and online lenders in addition to local and national banks — in order to get a mortgage loan that’s right for you.

What’s the best loan term?

One important thing to keep in mind when choosing a mortgage is the loan term, or payment schedule. The mortgage terms most commonly offered are 15 years and 30 years, although you can also find 10-, 20- and 40-year mortgages. Another important distinction is between fixed-rate and adjustable-rate mortgages.

For fixed-rate mortgages, interest rates are the same for the life of the loan. Unlike a fixed-rate mortgage, the interest rates for an adjustable-rate mortgage are only fixed for a certain amount of time (most frequently five, seven or 10 years). After that, the rate fluctuates annually based on the market interest rate.

When choosing between a fixed-rate and adjustable-rate mortgage, you should think about the length of time you plan to stay in your home. Fixed-rate mortgages might be a better fit for those who plan on living in a home for quite some time. Fixed-rate mortgages offer more stability over time compared to adjustable-rate mortgages, but adjustable-rate mortgages might offer lower interest rates upfront.

If you don’t have plans to keep your new house for more than three to 10 years, however, an adjustable-rate mortgage could give you a better deal.

There is no best loan term as a rule of thumb; it all depends on your goals and your current financial situation.

Make sure to do your research and understand what’s most important to you when choosing a mortgage.

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