Here Are Mortgage Rates for Sept. 28, 2022: Rates Climb Rapidly

A variety of significant mortgage rates saw rapid growth Wednesday. There’s been a staggering growth in 30-year fixed mortgage rates, and 15-year fixed rates inched up as well. For variable rates, the 5/1 adjustable-rate mortgage also climbed higher.

Mortgage rates have been increasing consistently since the start of 2022, following in the wake of a series of interest hikes by the Federal Reserve.

Interest rates are dynamic and unpredictable — at least on a daily or weekly basis — and they respond to a wide variety of economic factors. But the Fed’s actions, designed to mitigate the high rate of inflation, are having an unmistakable impact on mortgage rates. If you’re looking to buy a home, trying to time the market may not play to your favor.

If inflation continues to increase and rates continue to climb, it will likely translate to higher interest rates — and steeper monthly mortgage payments. As such, you may have better luck locking in a lower mortgage interest rate sooner rather than later. No matter when you decide to shop for a home, it’s always a good idea to seek out 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 6.86%, which is a growth of 48 basis points as seven days ago. (A basis point is equivalent to 0.01%.) Thirty-year fixed mortgages are the most common loan term.

A 30-year fixed rate mortgage will usually have a lower monthly payment than a 15-year one — but typically a higher interest rate. 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 5.97%, which is an increase of 28 basis points from the same time last week. You’ll definitely 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, if you’re able to afford the monthly payments, there are several benefits to a 15-year loan. You’ll most likely get a lower interest rate, and you’ll pay less interest in total because you’re paying off your mortgage much quicker.

5/1 adjustable-rate mortgages

A 5/1 ARM has an average rate of 5.12%, a rise of 29 basis points compared to a week 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, since the rate adjusts with the market rate, you may end up paying more after that time, as described in the terms of your loan. If you plan to sell or refinance your house before the rate changes, an ARM may make sense for you. Otherwise, changes in the market means your interest rate may be significantly higher once the rate adjusts.

Mortgage rate trends

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

The Federal Reserve recently raised interest rates by another 0.75 percentage points in an attempt to curb record-high inflation. The Fed has raised rates a total of five times this year, but inflation still remains high. 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. If you’re looking to buy a house in 2022, keep in mind that the Fed has signaled it will continue to raise rates, and mortgage rates could increase as the year goes on.

Whether rates follow their upward projection or begin to level out hinges on if inflation actually slows. We use data collected by Bankrate, which is owned by the same parent company as CNET, to track rate changes over time. This table summarizes the average rates offered by lenders across the country:

Current average mortgage interest rates

Loan type

Interest rate

A week ago

Change
30-year fixed rate 6.86% 6.38% +0.48
15-year fixed rate 5.97% 5.69% +0.28
30-year jumbo mortgage rate 6.88% 6.36% +0.52
30-year mortgage refinance rate 6.90% 6.36% +0.54

Updated on Sept.

28, 2022.

How to find the best mortgage rates

When you are ready to apply for a loan, you can connect with a local mortgage broker or search online. When looking into home mortgage rates, consider your goals and current finances. Things that affect what the interest rate you might get on your mortgage include: your credit score, down payment, loan-to-value ratio and your debt-to-income ratio.

Generally, you want a good credit score, a higher 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 additional factors such as fees, closing costs, taxes and discount points.

You should comparison-shop with multiple lenders — including credit unions and online lenders in addition to local and national banks — in order to get a mortgage that’s the right fit for you.

What is a good loan term?

When picking a mortgage, you should consider the loan term, or payment schedule. The loan terms most commonly offered are 15 years and 30 years, although you can also find 10-, 20- and 40-year mortgages. Mortgages are further divided into fixed-rate and adjustable-rate mortgages.

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

One important factor to take into consideration when deciding between a fixed-rate and adjustable-rate mortgage is how long you plan on staying in your house. For those who plan on staying long-term in a new house, fixed-rate mortgages may be the better option. Fixed-rate mortgages offer more stability over time in comparison to adjustable-rate mortgages, but adjustable-rate mortgages can sometimes offer lower interest rates upfront.

If you aren’t planning to keep your new house for more than three to 10 years, though, an adjustable-rate mortgage may give you a better deal.

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

It’s important to do your research and know your own priorities when choosing a mortgage.

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