Today’s best mortgage and refinance rates, May 5th, 2022: Rates rise

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Average mortgage rates edged higher for all loan terms compared to a week ago, according to data compiled by Bankrate. Rates for 30-year fixed, 15-year fixed, 5/1 ARMs and jumbo loans edged higher.

Average mortgage rates
Product Rate Last week Change
30-year fixed 5.48% 5.42% +0.06
15-year fixed 4.73% 4.65% +0.08
5/1 ARM 3.78% 3.67% +0.11
30-year fixed jumbo 5.45% 5.38% +0.07

Rates as of May 5, 2022.

The rates listed above are Bankrate’s overnight average rates and are based on the assumptions shown here. Actual rates listed on-site may vary. This story has been reviewed by Bill McGuire. All rate data accurate as of Thursday, May 5th, 2022 at 7:30 a.m.

>>Check out historical mortgage rate movements

You can save thousands of dollars over the life of your mortgage by getting multiple offers. “It is so important to shop around,” says Greg McBride, CFA, Bankrate chief financial analyst. “Not everyone offers the same price, and some lenders may have motivation to be very competitive on price.”

Mortgage rates for home purchase

30-year mortgage advances, +0.06%

The average rate for a 30-year fixed mortgage is 5.48 percent, an increase of 6 basis points over the last seven days. This time a month ago, the average rate on a 30-year fixed mortgage was lower, at 4.88 percent.

At the current average rate, you’ll pay principal and interest of $561.53 for every $100,000 you borrow.

The 30-year mortgage is the most popular home loan, and it has a number of advantages. Among them:

  • Lower monthly payment. The 30-year mortgage offers lower, more affordable payments spread over time compared with shorter-term mortgages.
  • Stability. With the 30-year, you lock in a consistent principal and interest payment. That predictability lets you plan your housing expenses for the long term. Keep in mind: Your monthly housing payment can change if your homeowners insurance and property taxes go up or, less likely, down.
  • Buying power. With lower payments, you can qualify for a larger loan amount and a more expensive home.
  • Flexibility. Lower monthly payments can free up some of your monthly budget for other goals, like saving for emergencies, retirement, college tuition or home repairs and maintenance.
  • Strategic use of debt. Some argue that Americans focus too much on paying down their mortgages rather than adding to their retirement accounts. A 30-year fixed-rate mortgage with a lower monthly payment can allow you to save more for retirement.

15-year mortgage moves higher,+0.08%

The average rate for the benchmark 15-year fixed mortgage is 4.73 percent, up 8 basis points over the last seven days.

Monthly payments on a 15-year fixed mortgage at that rate will cost around $517 per $100k borrowed. That’s clearly much higher than the monthly payment would be on a 30-year mortgage at that rate, but it comes with some big advantages: You’ll come out several thousand dollars ahead over the life of the loan in total interest paid and build equity much more quickly.

5/1 ARM advances, +0.11%

The average rate on a 5/1 adjustable rate mortgageis 3.78 percent, climbing 11 basis points over the last week.

Adjustable-rate mortgages, or ARMs, are mortgage loans that come with a floating interest rate. In other words, the interest rate can change intermittently throughout the life of the loan, unlike fixed-rate mortgages. These loan types are best for those who expect to sell or refinance before the first or second adjustment. Rates could be materially higher when the loan first adjusts, and thereafter.

Monthly payments on a 5/1 ARM at 3.78 percent would cost about $461 for each $100,000 borrowed over the initial five years, but could increase by hundreds of dollars afterward, depending on the loan’s terms.

Jumbo loan interest rate moves higher, +0.07%

The average rate for a jumbo mortgage is 5.45 percent, an increase of 7 basis points from a week ago. A month ago, the average rate was lower, at 4.83 percent.

At today’s average jumbo rate, you’ll pay $561.53 per month in principal and interest for every $100k you borrow. That’s an increase of $7.47 over what you would have paid last week.

Recap: How mortgage rates have moved over the past week

  • 30-year fixed mortgage rate: 5.48%, up from 5.42% last week, +0.06
  • 15-year fixed mortgage rate: 4.73%, up from 4.65% last week, +0.08
  • 5/1 ARM mortgage rate: 3.78%, up from 3.67% last week, +0.11
  • Jumbo mortgage rate: 5.45%, up from 5.38% last week, +0.07

Interested in refinancing? See rates for home refinance

30-year fixed-rate refinance moves up, +0.03%

The average 30-year fixed-refinance rate is 5.45 percent, up 3 basis points since the same time last week. A month ago, the average rate on a 30-year fixed refinance was lower, at 4.83 percent.

At the current average rate, you’ll pay $561.53 per month in principal and interest for every $100,000 you borrow.

Where mortgage rates are headed

Mortgage rates plunged early in the pandemic and scraped record lows — below 3 percent — at the start of 2021. The new year, however, has been characterized by rising rates. The days of sub-3 percent mortgage interest on the 30-year fixed are behind us, and many experts think the average rate on this loan will be 3.5 to 4 percent by the end of 2022. That’s still great by historical standards though. The ultra-low rates of 2020 and 2021 were an anomaly, but even 4 percent is a deal in the scheme of things.

“Mortgage rates continue to surge, as they have since the beginning of the year, as the outlook takes shape for Fed rate hikes that are sooner and faster than previously expected,” McBride says. “Mortgage rates are still well below 4 percent but in an environment of already sky-high home prices, more would-be homebuyers are priced out with each move higher in mortgage rates.”

Comparing mortgage options

The 30-year fixed-rate mortgage is the most popular option for homeowners, and this type of loan has a number of advantages, including:

  • Lower monthly payment: Compared to a shorter term, such as 15 years, the 30-year mortgage offers lower payments spread over time.
  • Stability: With a 30-year mortgage, you lock in a consistent principal and interest payment. Because of the predictability, you can plan your housing expenses for the long term. Remember: Your monthly housing payment can change if your homeowners insurance and property taxes go up or, less likely, down.
  • Buying power: With lower payments, you can qualify for a larger loan amount and a more expensive home.
  • Flexibility: Lower monthly payments can free up some of your monthly budget for other goals, like saving for emergencies, retirement, college tuition or home repairs and maintenance.
  • Strategic use of debt: Some argue that Americans focus too much on paying down their mortgages rather than adding to their retirement accounts. A 30-year fixed mortgage with a smaller monthly payment can allow you to save more for retirement.

That said, shorter term loans have gained popularity as rates have been historically low. Although they have higher monthly payments compared to 30-year mortgages, there are some big benefits if you can afford the upfront costs. Shorter-term loans can help you achieve:

  • Greatly reduced interest costs: Because you pay off the loan faster, you’ll be able to pay less interest overall.
  • Lower interest rate: On top of less time for that interest to compound, most lenders price shorter-term mortgages with lower rates.
  • Build equity faster: The faster you pay off your mortgage, the faster you’ll own value in your home outright. That’s especially handy if you want to borrow against your property to fund other spending.
  • Debt-free sooner: A shorter-term mortgage means you’ll own your house free and clear sooner than you would with a longer-term loan.

Current mortgage rate landscape

The current mortgage rate environment has been unstable because of the coronavirus pandemic, but generally rates have been low. For a while, some lenders were increasing rates because they were struggling to deal with the demand. In general, however, rates are consistently below 4 percent and even dipping below 3%. This is an especially good time for people with good to excellent credit to lock in a low rate for a purchase loan. However, lenders are also raising credit standards for borrowers and demanding higher down payments as they try to dampen their risks.

What comes next:

Featured lenders, May 5, 2022