Current Mortgage Rates: Compare Today's Rates

Current Mortgage Rates: Compare Today's Rates

Mortgage rates are leveling off after climbing steadily since the beginning of the year. Although rates reached historic lows during the COVID-19 pandemic, they quickly reached their highest levels since 2008 earlier this year. Interest rates have been increasing in response to surging inflation, which is at its highest point in four decades, as well as the Federal Reserve raising rates multiple times for the first time since 2018. The Fed raised interest rates by 0.75 percentage points for the second time in July, one of the largest rate hikes since 1994.

Higher interest rates have significant implications for home buyers, especially as home prices remain sky-high. Higher mortgage rates, even by a few tenths of a percentage point, can add tens of thousands of dollars over the life of your loan. Higher rates shouldn't discourage you from buying a home, however. Even though rates have escalated, it's still a great time to lock in a mortgage rate, since rates are still historically low overall. Although rates crept back up and are now hovering in the mid-to-upper 5% range, generally speaking, in a rising rate environment, the sooner you act, the better, because it can help you secure a lower rate. 

"Mortgage rates have bounded more than 2 percentage points higher since the end of last year, one the largest and fastest increases ever seen," said Greg McBride, chief financial analyst at CNET's sister site Bankrate.

Here's everything you need to know about mortgage rates and how they work. 

What is a mortgage rate?

Your mortgage rate is the percentage of interest a lender charges for providing the loan you need to purchase a home. The interest helps cover the costs associated with lending money -- and there are multiple factors that determine the rate you're offered. Some are specific to you and your financial situation and others are influenced by macro market conditions, such as the overall level of demand for loans in your area or nationwide.

What factors determine my mortgage rate?

The factors that most often determine a mortgage rate are your credit score, the property's location, the size of the down payment, the terms of the loan and the type of loan. 

"A lot of mortgages are [paid back in 360 payments] over 30 years. Shorter-term loans, like 10, 15 or 20 years have lower interest rates," says Clint Lotz, president and founder of the predictive credit tech company TrackStar. "A larger down payment means a lower interest rate; if a homebuyer can make the 20% down payment, that's great, but if not, lenders will usually require the buyer to purchase PMI: private mortgage insurance."

In addition to the loan term, the loan type will impact your interest rate. Some loans have a fixed interest rate for the entire life of the loan, while others have an adjustable rate -- which could result in significantly higher payments down the road. 

Current mortgage and refinance rates

We use information collected by Bankrate, which is owned by the same parent company as CNET, to track daily mortgage rate trends. The above table summarizes the average rates offered by lenders across the country. 

What credit score do you need to get a mortgage?

Most conventional loans require a credit score of 620 or higher, but Federal Housing Administration and other loan types may accommodate lenders with scores as low as 500, depending on your down payment. If you have a high credit score, you may be offered a lower interest rate and more modest down payment. Improving your credit score before applying for a mortgage can save you money even if you already qualify for a loan.

"Credit is the biggest factor in interest rates on both mortgages and all other lending products, so making sure credit balances are below 30% is key to maximizing a credit score," says Lotz. "If a person finds errors on their credit report, they should dispute them to ensure the most accurate history."

What is annual percentage rate, and what does it mean for mortgages?

Your annual percentage rate is a key factor in choosing a mortgage. The Federal Open Market Committee lowered the US prime rate in 2020, which paved the way for today's relatively low rates: The interest rate offered to you by a lender is based on the prime rate plus whatever premium the institution decides to charge you, based on your financial situation.

How does the APR impact principal and interest?

Most mortgage loans are based on an amortization schedule: You'll pay the same amount each month for the life of the loan even though the generated interest will be highest at the beginning of the loan and will taper as the principal decreases. (Your amortization schedule will show how much of your monthly payment goes to interest and how much pays down the principal of the loan.) Ultimately, most borrowers appreciate the convenience of a fixed, predictable monthly payment. 

What else can impact my rate? 

Getting a good mortgage rate has to do with building credit but also managing it well, including saving for a down payment and keeping additional savings on hand to cover unexpected expenses. 

In most cases, you don't want to stretch so far with your down payment that you are left without cash reserves when you move into your home, and keeping some liquid savings may help your lender's confidence in your ability to pay back the loan, potentially lowering your rate.

"Banks are very keen on making sure that borrowers have sufficient savings in reserve post-closing. A good rule of thumb is six months of mortgage/tax and insurance for loans under $750,000 and 12 months for jumbo loans," says Melissa Cohn, an executive mortgage banker at Connecticut-based William Raveis Mortgage.

Keep in mind that credit scoring services like FICO adjust your credit based on mortgage inquiries; Lotz has a good piece of advice for those who are shopping around for the best rate at different lenders.

"The FICO company allows multiple mortgage inquiries within a 10-day period to be counted as one," says Lotz. "This allows a borrower to compare offers and rates from different lenders, but borrowers need to make sure they are within that one-day window, otherwise their scores will start to go down from excessive inquiries."

Shopping mortgage rates

Mortgage lenders often publish online their rates for different mortgage types, which can help you research and narrow down which lenders you apply to for preapproval. Shopping around is an important part of the process. And it's often a mistake to rush the process.

"The best rate [should be considered] -- but as important, the best service and with a reliable lender who can close the promised rate," says Cohn. "It's one thing -- especially right now -- to get quoted a rate. It's a very different matter of closing it in a timely fashion."

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Mortgage Interest Rates Today for Aug. 17, 2022: 30-Year Fixed Rate Eases

Mortgage Interest Rates Today for Aug. 17, 2022: 30-Year Fixed Rate Eases

Today rates followed a split path. While 15-year fixed mortgage rates saw an increase along with 5/1 adjustable-rate mortgages, interest rates on 30-year fixed-rate mortgages sank a bit. 

Though mortgage rates have been rather consistently going up since the start of this year, what happens next depends on whether inflation continues to climb or begins to retreat. Interest rates are dynamic and unpredictable -- at least on a daily or weekly basis -- and they respond to a wide variety of economic factors. Right now, they're particularly sensitive to inflation and the prospect of a US recession. With so much uncertainty in the market, if you're looking to buy a home, trying to time the market may not play to your favor. If inflation rises and rates climb, this could translate to higher interest rates and steeper monthly mortgage payments. For this reason, 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 30-year fixed mortgage interest rate is 5.54%, which is a decrease of 3 basis points from one week ago. (A basis point is equivalent to 0.01%.) Thirty-year fixed mortgages are the most frequently used loan term. A 30-year fixed rate mortgage will usually have a lower monthly payment than a 15-year one -- but often 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 4.89%, which is an increase of 2 basis points from seven days ago. Compared to a 30-year fixed mortgage, a 15-year fixed mortgage with the same loan value and interest rate will have a larger monthly payment. But a 15-year loan will usually be the better deal, as long as you can afford the monthly payments. 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 adjustable-rate mortgage has an average rate of 4.21%, an increase of 2 basis points from the same time last week. You'll typically get a lower interest rate (compared to a 30-year fixed mortgage) with a 5/1 adjustable-rate mortgage in the first five years of the mortgage. But since the rate changes with the market rate, you might end up paying more after that time, as described in the terms of your loan. Because of this, an ARM could be a good option if you plan to sell or refinance your house before the rate changes. If not, shifts in the market may significantly increase your interest rate.

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 another 0.75 percentage points in an attempt to curb record-high inflation. The Fed has raised rates a total of four 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	5.54%	5.57%	-0.03
15-year fixed rate	4.89%	4.87%	+0.02
30-year jumbo mortgage rate	5.53%	5.56%	-0.03
30-year mortgage refinance rate	5.50%	5.53%	-0.03

Updated on Aug. 17, 2022.

How to find personalized mortgage rates

You can get a personalized mortgage rate by reaching out to your local mortgage broker or using an online calculator. When researching home mortgage rates, consider your goals and current financial situation. Specific mortgage rates will vary based on factors including credit score, down payment, debt-to-income ratio and loan-to-value ratio. Generally, you want a good 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 additional factors such as fees, closing costs, taxes and discount points. Make sure you talk to multiple lenders -- like local and national banks, credit unions and online lenders -- and comparison shop to find the best loan for you.

What is a good loan term?

One important thing to consider when choosing a mortgage is the loan term, or payment schedule. The most common mortgage terms are 15 years and 30 years, although 10-, 20- and 40-year mortgages also exist. Mortgages are further divided into fixed-rate and adjustable-rate mortgages. The interest rates in a fixed-rate mortgage are fixed for the duration of the loan. Unlike a fixed-rate mortgage, the interest rates for an adjustable-rate mortgage are only stable for a certain amount of time (commonly five, seven or 10 years). After that, the rate fluctuates annually based on the market interest rate.

One important factor to take into consideration when choosing between a fixed-rate and adjustable-rate mortgage is how long you plan on living in your home. If you plan on staying long-term in a new house, fixed-rate mortgages may be the better option. Fixed-rate mortgages offer greater 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, though, an adjustable-rate mortgage may 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. It's important to do your research and know your own priorities when choosing a mortgage.

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Compare 15-Year Mortgage Rates for August 2022

Compare 15-Year Mortgage Rates for August 2022

Buying a home is a major financial decision, and interest rate levels have a major impact on how much your mortgage will cost you over the years. When you become a homeowner, you'll want to secure the right type of mortgage at the lowest possible rate. If you can manage a higher monthly payment, a 15-year mortgage is an attractive option if you're looking to pay off your home loan sooner while saving on interest.

Current 15-year mortgage rate trends

Rates for the 15-year mortgage are currently in the mid-to-upper 4% range, having dropped slightly since the Federal Reserve's most recent interest rate hike to combat inflation. Although rates had been steadily increasing since the beginning of 2022, they dropped because the Fed's increase was in line with market expectations. Interest rates typically go up when inflation soars, and the pressure on rates and prices has been most apparent in the real estate industry.

Even though mortgage rates dipped slightly, home prices will remain high in 2022. The more expensive homes get, the bigger the mortgage you'll need to afford that home. Make sure you shop around for mortgage lenders that can make worthwhile rates available to you. You should always meet with multiple lenders to figure out which loan offers make the most sense for your personal financial situation. 

Here's what you need to know to lock in the best mortgage rate possible for a new home.

The pros of a 15-year fixed mortgage

• Shorter loan term: The obvious benefit of a 15-year fixed mortgage is that it takes half the length of time to pay off compared to a 30-year mortgage. You will have higher monthly payments, but you'll pay this home loan off twice as fast, resulting in less interest over time. 
• Lower interest rates: Usually, 15-year fixed interest rates are lower than 30-year rates because the lender does not have to predict rates for an additional 15 years into the future, like they do for a 30-year loan. 
• Build equity in your home much faster: A 15-year fixed mortgage allows you to build more equity in your home faster. This means you can enjoy some of the advantages of homeownership, such as refinancing your home loan when rates go down again, sooner. Typically, to get a good refi rate, lenders like to see at least 20% in home equity.

The cons of a 15-year fixed mortgage

• Higher monthly payments: One downside to a 15-year mortgage is that you're stuck with high monthly payments for the duration of the home loan. For example, say you make a 20% down payment on a $500,000 mortgage at a 4% interest rate with a 15-year fixed mortgage, your monthly payment will be about $3,350, compared to just $2,300 with a 30-year fixed mortgage.
• The maximum mortgage amount you can borrow is smaller: Since you're making high payments every month, lenders will offer you a smaller mortgage amount than they might with a 30-year loan. This reduces the risk to the lender that you will default on the loan.
• Less financial flexibility overall: If you put all of your eggs into a 15-year mortgage, it could limit your opportunity to spend your money in other ways. For example, you may have less available to contribute to investment or retirement accounts. You may also have less of a financial cushion to fall back on if you run into difficulties.

Something to consider 

If you like the idea of paying off your mortgage sooner, but are worried about committing to higher monthly payments, there's an alternative to consider. If you choose a 30-year mortgage over a 15-year mortgage, you can make additional payments throughout the year, which will help shorten your loan term. This allows you to effectively pay off your 30-year mortgage sooner, without locking yourself into the higher monthly payments that are attached to a 15-year mortgage.

Current mortgage and refinance rates

We use information collected by Bankrate, which is owned by the same parent company as CNET, to track daily mortgage rate trends. The above table summarizes the average rates offered by lenders across the country. 

FAQs

What is a 15-year fixed mortgage?

A 15-year fixed mortgage is a loan to buy a house that you will pay off over 15 years with a set interest rate. Since it has a shorter loan term than a 30-year mortgage, the monthly payments are much higher than with a fixed 30-year loan.

Who can qualify for a 15-year mortgage?

You must be able to afford higher monthly payments to qualify for a 15-year loan and confirm your ability to pay. That means your salary, credit score and debt-to-income ratio -- that is, how much debt you carry each month divided by your monthly income before taxes -- play a bigger role in a 15-year mortgage than they do for a 30-year mortgage. So if you have high-interest debt you're trying to pay down, a lender will factor in those payments when considering approving you for the loan.

What is the difference between a 15-year mortgage and a 30-year mortgage?

The main difference between a 15-year mortgage and a 30-year mortgage is that a 15-year mortgage will ultimately cost you less by saving you up to tens of thousands of dollars over the lifetime of the loan. You also pay a lower interest rate for a shorter amount of time, thereby lessening the overall cost of your loan. But paying off the loan in half the time means that your monthly payments can be almost double what they are for a 30-year loan.

More mortgage tools and resources

You can use CNET's mortgage calculator to help determine how much you can afford for a house and work out how to manage financially. The tool takes into account your monthly income, expenses and debt payments. In addition to those factors, your mortgage rate will depend on your credit score and the zip code where you are looking to buy a house.

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Mortgage Interest Rates for Sept. 1, 2022: Rates Climb

Mortgage Interest Rates for Sept. 1, 2022: Rates Climb

Some important mortgage rates increased today. The average 15-year fixed and 30-year fixed mortgage rates both grew. For variable rates, the 5/1 adjustable-rate mortgage also floated higher.

Though mortgage rates have been rather consistently going up since the start of this year, what happens next depends on whether inflation continues to climb or begins to retreat. Interest rates are dynamic and unpredictable -- at least on a daily or weekly basis -- and they respond to a wide variety of economic factors. Right now, they're particularly sensitive to inflation and the prospect of a US recession. With so much uncertainty in the market, if you're looking to buy a home, trying to time the market may not play to your favor. If inflation rises and rates climb, this could translate to higher interest rates and steeper monthly mortgage payments. For this reason, 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 30-year fixed mortgage interest rate is 5.95%, which is an increase of 3 basis points compared to one week ago. (A basis point is equivalent to 0.01%.) The most common loan term is a 30-year fixed mortgage. A 30-year fixed rate mortgage will usually have a smaller monthly payment than a 15-year one -- but usually a higher interest rate. You won't be able to pay off your house as quickly and you'll pay more interest over time, but a 30-year fixed mortgage is a good option if you're looking to minimize your monthly payment.

15-year fixed-rate mortgages

The average rate for a 15-year, fixed mortgage is 5.19%, which is an increase of 11 basis points from the same time last week. Compared to a 30-year fixed mortgage, a 15-year fixed mortgage with the same loan value and interest rate will have a higher monthly payment. But a 15-year loan will usually be the better deal, if you're able to afford the monthly payments. 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 4.42%, a climb of 9 basis points compared to a week ago. For the first five years, you'll usually get a lower interest rate with a 5/1 adjustable-rate mortgage compared to a 30-year fixed mortgage. But you could end up paying more after that time, depending on the terms of your loan and how the rate adjusts with the market rate. If you plan to sell or refinance your house before the rate changes, an adjustable-rate mortgage could make sense for you. If not, shifts in the market could significantly increase your interest rate.

Mortgage rate trends

Though mortgage rates were historically low at the beginning of 2022, they have been rising somewhat steadily since then. 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 four 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 changes in these daily rates. 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	5.95%	5.92%	+0.03
15-year fixed rate	5.19%	5.08%	+0.11
30-year jumbo mortgage rate	5.94%	5.93%	+0.01
30-year mortgage refinance rate	5.92%	5.85%	+0.07

Updated on Sept. 1, 2022.

How to find personalized mortgage rates

When you are ready to apply for a loan, you can reach out to a local mortgage broker or search online. When researching home mortgage rates, take into account your goals and current financial situation. A range of factors -- including your down payment, credit score, loan-to-value ratio and debt-to-income ratio -- will all affect your mortgage interest rate. Generally, you want a higher credit score, a larger down payment, a lower DTI and a lower LTV to get a lower interest rate. Apart from the mortgage rate, additional costs including closing costs, fees, discount points and taxes might also impact the cost of your home. Be sure to 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's the best loan term?

One important thing to consider when choosing a mortgage is the loan term, or payment schedule. The most common mortgage terms are 15 years and 30 years, although 10-, 20- and 40-year mortgages also exist. 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 (commonly five, seven or 10 years). After that, the rate adjusts annually based on the current interest rate in the market.

One thing to think about when deciding between a fixed-rate and adjustable-rate mortgage is how long you plan on staying in your house. Fixed-rate mortgages might be a better fit if you plan on staying in a home for quite some time. Fixed-rate mortgages offer greater stability over time in comparison to adjustable-rate mortgages, but adjustable-rate mortgages might 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 might give you a better deal. The best loan term is entirely dependent on your personal situation and goals, so be sure to think about what's important to you when choosing a mortgage.

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Today's Mortgage Rates for Aug. 23, 2022: 30-Year Fixed Rate Soars Higher

Today's Mortgage Rates for Aug. 23, 2022: 30-Year Fixed Rate Soars Higher

A variety of notable mortgage rates increased today. There's been a staggering gain in 30-year fixed mortgage rates, and 15-year fixed rates cruised higher as well. At the same time, average rates for 5/1 adjustable-rate mortgages also were boosted.

Though mortgage rates have been rather consistently going up since the start of this year, what happens next depends on whether inflation continues to climb or begins to retreat. Interest rates are dynamic and unpredictable -- at least on a daily or weekly basis -- and they respond to a wide variety of economic factors. Right now, they're particularly sensitive to inflation and the prospect of a US recession. With so much uncertainty in the market, if you're looking to buy a home, trying to time the market may not play to your favor. If inflation rises and rates climb, this could translate to higher interest rates and steeper monthly mortgage payments. For this reason, 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 30-year fixed-mortgage rate average is 5.87%, which is an increase of 40 basis points from one week ago. (A basis point is equivalent to 0.01%.) Thirty-year fixed mortgages are the most frequently used 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. You won't be able to pay off your house as quickly and you'll pay more interest over time, but a 30-year fixed mortgage is a good option if you're looking to minimize your monthly payment.

15-year fixed-rate mortgages

The average rate for a 15-year, fixed mortgage is 5.04%, which is an increase of 17 basis points from the same time last week. You'll definitely have a larger 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 can 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 4.31%, an addition of 9 basis points from the same time last week. For the first five years, you'll typically get a lower interest rate with a 5/1 adjustable-rate mortgage compared to a 30-year fixed mortgage. 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. If you plan to sell or refinance your house before the rate changes, an ARM may make sense for you. But if that's not the case, you could be on the hook for a significantly 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 another 0.75 percentage points in an attempt to curb record-high inflation. The Fed has raised rates a total of four 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 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 country:

Today's mortgage interest rates

Rates accurate as of Aug. 23, 2022.

How to find the best mortgage rates

You can get a personalized mortgage rate by reaching out to your local mortgage broker or using an online calculator. In order to find the best home mortgage, you'll need to take into account your goals and overall financial situation. 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. Having a good credit score, a higher down payment, a low DTI, a low LTV, or any combination of those factors can help you 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. 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 loan that works best for you.

How does the loan term impact my mortgage?

When picking a mortgage, you should consider the loan term, or payment schedule. The most common mortgage terms are 15 years and 30 years, although 10-, 20- and 40-year mortgages also exist. Another important distinction is between fixed-rate and adjustable-rate mortgages. For fixed-rate mortgages, interest rates are stable for the life of the loan. For adjustable-rate mortgages, interest rates are the same for a certain number of years (typically five, seven or 10 years), then the rate fluctuates annually based on the market interest rate.

One thing to take into consideration when deciding between a fixed-rate and adjustable-rate mortgage is how long you plan on living in your home. Fixed-rate mortgages might be a better fit if you plan on staying in a home for quite some time. Fixed-rate mortgages offer greater stability over time in comparison to adjustable-rate mortgages, but adjustable-rate mortgages can sometimes offer lower interest rates upfront. If you don't have plans to keep your new home for more than three to 10 years, however, an adjustable-rate mortgage might give you a better deal. There is no best loan term as a general rule; it all depends on your goals and your current financial situation. Make sure to do your research and know what's most important to you when choosing a mortgage.

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Refinance Rates for Aug. 23, 2022: All Rates Jump

Refinance Rates for Aug. 23, 2022: All Rates Jump

Both 15-year fixed and 30-year fixed refinances saw their mean rates go up. The average rate on 10-year fixed refinance also saw an increase.

Like mortgage rates, refinance rates fluctuate on a daily basis. With inflation at a 40-year high, the Federal Reserve has hiked the federal funds rate four times this year and is poised to do so again in 2022 to try to slow rampant inflation. Though mortgage rates are not set by the central bank, these federal rate hikes increase the cost of borrowing money. Whether refinance rates will continue to rise or fall will depend on what happens next with inflation. If inflation begins to cool, rates will likely follow suit. But if inflation remains high, we could see refinance rates maintain an upward trajectory. If rates for a refi are currently lower than your existing mortgage rate, you could save money by locking in a rate now. As always, consider your goals and circumstances, and compare rates and fees to find a mortgage lender who can meet your needs.

30-year fixed-rate refinance

The current average interest rate for a 30-year refinance is 5.81%, an increase of 36 basis points over this time last week. (A basis point is equivalent to 0.01%.) A 30-year fixed refinance will typically have lower monthly payments than a 15-year or 10-year refinance. This makes 30-year refinances good for people who are having difficulties making their monthly payments or simply want a bit more breathing room. Be aware, though, that interest rates will typically be higher compared to a 15-year or 10-year refinance, and you'll pay off your loan at a slower rate.

15-year fixed-rate refinance

For 15-year fixed refinances, the average rate is currently at 5.06%, an increase of 27 basis points from what we saw the previous week. A 15-year fixed refinance will most likely raise your monthly payment compared to a 30-year loan. On the other hand, you'll save money on interest, since you'll pay off the loan sooner. You'll also typically get lower interest rates compared to a 30-year loan. This can help you save even more in the long run.

10-year fixed-rate refinance

For 10-year fixed refinances, the average rate is currently at 5.14%, an increase of 22 basis points over last week. Compared to a 30-year and 15-year refinance, a 10-year refinance will usually have a lower interest rate but higher monthly payment. A 10-year refinance can help you pay off your house much quicker and save on interest. Just be sure to carefully consider your budget and current financial situation to make sure that you can afford a higher monthly payment.

Where rates are headed

At the start of the pandemic, refinance rates dropped to historic lows, but they have been mostly climbing since the beginning of this year. Refinance rates rose due to inflation, which is at its highest level in four decades, as well as actions taken by the Federal Reserve. The Fed recently raised interest rates by another 0.75 percentage points and is prepared to raise rates again this year to slow the economy. Still, it's unclear exactly what will happen next in the market. If inflation continues to rise, rates are likely to climb. But if inflation starts to cool, rates could level off and begin to decline.

We track refinance rate trends using information collected by Bankrate, which is owned by CNET's parent company. Here's a table with the average refinance rates reported by lenders across the US:

Average refinance interest rates

Product	Rate	A week ago	Change
30-year fixed refi	5.81%	5.45%	+0.36
15-year fixed refi	5.06%	4.79%	+0.27
10-year fixed refi	5.14%	4.92%	+0.22

Rates as of Aug 23, 2022.

How to find personalized refinance rates

It's important to understand that the rates advertised online may not apply to you. Your interest rate will be influenced by market conditions as well as your credit history and application.

Having a high credit score, low credit utilization ratio and a history of consistent and on-time payments will generally help you get the best interest rates. You can get a good feel for average interest rates online, but make sure to speak with a mortgage professional in order to see the specific rates you qualify for. To get the best refinance rates, you'll first want to make your application as strong as possible. The best way to improve your credit ratings is to get your finances in order, use credit responsibly and monitor your credit regularly. Don't forget to speak with multiple lenders and shop around.

Refinancing can be a great move if you get a good rate or can pay off your loan sooner -- but consider carefully whether it's the right choice for you at the moment.

When should I refinance?

In order for a refinance to make sense, you'll generally want to get a lower interest rate than your current rate. Aside from interest rates, changing your loan term is another reason to refinance.When deciding whether to refinance, be sure to take into account other factors besides market interest rates, including how long you plan to stay in your current home, the length of your loan term and the amount of your monthly payment. And don't forget about fees and closing costs, which can add up.

As interest rates have rather steadily increased since the beginning of the year, the pool of people eligible for refinancing has shrunk significantly. If you bought your house when interest rates were lower than current rates, you may likely not gain any financial benefit from refinancing your mortgage.

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Home equity line of credit heloc rates for september 2022 holiday home equity line of credit heloc rates for september 2022 movie home equity line of credit how does a home equity line of credit work home equity line of credit home equity loan home equity loan rates wells fargo home equity loan home equity loan requirements

Home Equity Line of Credit: HELOC Rates for September 2022

Home Equity Line of Credit: HELOC Rates for September 2022

A home equity line of credit, or HELOC, is a loan that allows you to borrow against the equity you've built up in your home and functions like a credit card. It provides an open line of credit that you can access for a certain amount of time (usually 10 years). During that time, you're only required to pay back the interest on money you've withdrawn, which means you can borrow a large amount of money for an extended period of time while only making minimum monthly payments.

HELOCs can be a good option because they have lower rates than most credit cards, personal loans, home equity loans and mortgage refinances. But HELOCs are also risky because they're secured loans, which require collateral to obtain financing: Your home serves as the collateral, so if you're unable to pay back the money you've withdrawn, you could lose your house. In addition, HELOCs have variable interest rates that mean your rate can go up or down with the market, so you won't always have a predictable monthly payment.

We'll walk you through how a HELOC works, how to decide if it's the right option for you and how it stacks up against other loan types.

Current HELOC rate trends

Right now, the average interest rate for a HELOC is 6.5%, according to Bankrate, which is owned by the same parent company as CNET. Anything below the average rate is typically considered a good rate for HELOCs. 

Interest rates for HELOCs are variable and largely determined by the benchmark interest rate, which is set by the Federal Reserve. So far this year, the Fed has raised the benchmark interest rate four times and has signaled it will continue raising rates throughout 2022. Interest rates for HELOCs tend to be lower than mortgage rates and other home equity loan rates, which is one of the benefits. They also usually have introductory periods during which they offer an even lower rate for a certain amount of time. 

What is a HELOC?

A HELOC is a home loan that allows you to tap into your home's equity over an extended period of time. You can find out how much equity you have in your home by subtracting your remaining mortgage balance from the house's current market value. So if your house is worth $500,000 and you have $300,000 left to pay off on your mortgage, you would have $200,000 in equity. Typically you can borrow up to 85% of your equity — in this case, that's $170,000.

A HELOC functions as a revolving line of credit that you can continually access. The time period when you can draw money from your line of credit is called the draw period, and it's usually 10 years for HELOCs. This could be a good option if you need access to money, but aren't sure how much you'll need (or when you'll need it). HELOCs also tend to have lower interest rates than other types of home loans or personal loans.

If you need cash for home improvements or to pay higher education costs like tuition, a HELOC can be beneficial because you can repeatedly withdraw money over the course of your loan term. Plus, you only have to pay interest on the money that you withdraw. So, if you're approved for a HELOC of $100,000 and only withdraw $25,000, you'll only pay interest on the $25,000. 

How do HELOCs work?

Since HELOCs work like a line of credit, during the draw period you can take out money as many times as you need via check or a debit card, as long as it's below your total HELOC loan amount. You must also make minimal monthly payments, typically just for the interest that accrues during the draw period. As you repay your HELOC, this money is added back to your revolving balance (so you can continue to withdraw funds).

Once the draw period comes to an end you enter the repayment period, which usually lasts between 10 to 20 years. At this point, you cannot take more money out of your HELOC. Once you're in the repayment period, your monthly payments will go up because you must start paying back the principal (the amount you withdrew) in addition to the accrued interest.

Pros of a HELOC

• Lower interest rates: HELOCs typically have lower interest rates than other home equity loans, personal loans or credit cards. 
• Long draw and repayment periods: Most HELOCs let you withdraw money for as long as 10 years, and then offer an even longer repayment period (usually up to 20 years).
  
• You can take the money in installments: You don't have to use all of the money available at once, and you only have to pay interest on the funds you withdraw.
  

Cons of a HELOC

• You have to use your own home as collateral: If you default on a HELOC or can't make your payments, you could lose your home. When you put a house up as collateral and cannot repay your loan, the bank or lender can foreclose on your home, which means they can take ownership of your house in order to make up for the money they lost. 
• They have variable interest rates: Your initial interest rate may be low, but HELOC rates are variable and not fixed. This means they can fluctuate depending on what's happening with the economy and the benchmark interest rate. This means your monthly payments are not predictable and can fluctuate over the course of the loan. While there are fixed-rate HELOCs, they are less common and are considered a hybrid between a HELOC and a home equity loan.
  
• There may be minimum withdrawal amounts: Some HELOCs have minimal initial withdrawal amounts, which could lead you to taking out more money than planned (and having to pay back more than planned).
  

HELOCs vs. home equity loans

HELOCs and home equity loans both allow you to borrow against the equity you've built up in a home. With both, you take out a second home loan in addition to your mortgage. Your home is also used as collateral to secure either type of loan. A home equity loan, however, offers a lump sum of cash that you pay back in fixed monthly installments. A HELOC, on the other hand, approves you for a set loan amount and then allows you to withdraw only what you need, when you need it.

A HELOC has a variable interest rate, whereas home equity loans are fixed-rate loans. This means, you'll have a more predictable monthly payment with a home equity loan. HELOCs are much more flexible, but your monthly payments can be more unpredictable since your interest rate can fluctuate. With a HELOC, you need to make sure you can afford your monthly interest payments if your rate shoots up.

A HELOC is better if

• You need access to credit for an extended period of time (usually 10 years)
• You need more time to repay the loan amount
  
• You want the flexibility to withdraw your money in installments and not all at once
  

A home equity loan is better if

• You want a fixed interest rate
• You want a predictable monthly repayment schedule
  
• You want one lump sum of cash and know exactly how much money you need

HELOCs vs. cash-out refinances

A cash-out refinance is a different type of loan than a HELOC: You are quite literally cashing out the equity you've built up in your home over the years. It replaces your current mortgage with a new mortgage equal to your home's value, and allows you to cash out the amount you've built in equity. If your home is valued at $300,000 and you still owe $100,000 on a mortgage, the difference of $200,000 is your home equity. Lenders often let you cash out 80% of your equity ($140,000 in this case).

With a HELOC, you're also cashing out your equity, but you are taking out an additional loan alongside your current mortgage. So, you will have to make your monthly mortgage payments in addition to repaying your HELOC each month. With a cash-out refinance, you are only responsible for your mortgage payment every month. However, your mortgage payment will be more expensive because you added more money onto your mortgage when you cashed out your equity.

A cash-out refinance offers you this equity in a lump sum, whereas a HELOC lets you draw on your equity in installments and offers a yearslong line of credit.

A HELOC is better if

• You need access to credit for an extended period of time (usually 10 years)
• You need a longer loan repayment period
  
• You want to the flexibility to withdraw your money in installments
  

A cash-out refinance is better if

• You want to refinance your mortgage to a lower interest rate or shorter term
• You want one one lump sum of cash and know the amount
  
• You want one fixed monthly mortgage payment
  

FAQs

What is a good HELOC rate?

Anything below the average rate is typically considered a good rate for HELOCs. Currently, the average interest rate for a HELOC is 6.5%, according to Bankrate. 

How do I qualify for a HELOC?

To qualify for a HELOC, you must have good credit, at least 15% to 20% equity in your home and a debt-to-income ratio that does not exceed 43%. (Your debt-to-income ratio is your total monthly debts divided by your gross monthly income.) So, if you make $4,000 a month before taxes and pay $1,500 in debts each month, your DTI would equal 37.5%. The lower your DTI, the better your approval chances.

If you have good or excellent credit, you could lock in a lower HELOC rate closer to 3% to 5%. If you have below average credit expect to pay rates closer to 9% to 10%. Lenders usually want to see at least a 620 credit score or higher. You can be denied for a HELOC if you don't have a high enough credit score or income. You can also be denied if you don't have enough equity built up in your home. Most lenders require at least 15% to 20%. 

What can I use a HELOC for?

You can use your line of credit for almost anything, but HELOCs are typically best for people who need access to available credit over a long period of time or who will be making recurring withdrawals. For example, HELOCs are good for home improvement projects that could potentially take years or higher education expenses like tuition.

How do I apply for a HELOC?

You have to be approved for a HELOC by a bank or lender just like with your mortgage. You will need to provide financial documents like pay stubs and information about your home's value, like your loan-to-value ratio. Lenders will also run a credit check before approving you. 

In some cases, you may need to have your home appraised to confirm its current market value. It's important to interview multiple lenders to compare rates and fees in order to find one who will give you the best rates. Some experts recommend starting with the bank or lender that already holds your mortgage, but shopping around can help you compare offers. 

More mortgage tools and resources

You can use CNET's mortgage calculator to help you determine how much house you can afford. The CNET mortgage calculator factors in variables like the size of your down payment, home price and interest rate to help you figure out how large of mortgage you may be able to afford. Using the CNET mortgage calculator can help you understand how much of a difference even a slight increase in rates can make in how much interest you'll pay over the lifetime of your loan.

Compare mortgage rates:

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Adjustable-rate mortgages: Everything you need to know

Adjustable-rate mortgages: Everything you need to know

The vast majority of mortgages are of the traditional, fixed-rate variety which offer stability and predictable payments for the life of your loan. Adjustable-rate mortgages offer more flexibility -- and often a lower initial rate -- than fixed-rate loans. But you're going to take on some risk in exchange for those benefits. 

Low rates on fixed-rate mortgages may have driven more borrowers away from ARMs over the past decade -- they currently make up a tiny share of the overall mortgage origination market -- but they can still be a good choice in the right circumstances, according to Mike Swaleh, area manager with Fairway Independent Mortgage Company in St. Louis.

"You really only want to take on the risk of an ARM product when the rate difference compared to a fixed-rate loan is high enough to make it worth it," says Swaleh. ARMs can also be a good idea if you're not planning on owning the home for longer than the introductory period or you have the financial flexibility to withstand a high rate increase.

Below, we break down how ARMs work, how they differ from other types of mortgages and whether they're a good option for you.

What are adjustable-rate mortgages?

There are many types of ARMs, but they all have one thing in common: a fixed-rate introductory period followed by a variable interest rate. This is what differentiates all ARM products from traditional fixed-rate mortgages.

With an ARM, you'll pay a set rate for an introductory period of one or more years (more on that below), after which the interest rate can go up or down -- depending on a range of macro-economic factors. Once you're in the adjustable-rate period, your monthly payment could change significantly every year -- making budgeting more difficult.

The big appeal of ARMs is that the initial introductory rate is usually lower than the rate on a fixed-rate mortgage. This has held true even in 2021, when fixed rates have hit historic lows. With an adjustable-rate mortgage, you're taking a gamble that the savings you collect in that introductory period will pay off even if your payment eventually goes up. 

Two factors that will affect your payment during the adjustable-rate period are indexes and caps.

Indexes that affect ARMs

Short-term rates like those for ARMs are based on a few major indexes. These indexes set the base rate for any loans that are made. The most common ones for ARMs are: 

• The Constant Maturity Treasury: This is the weekly average yield on the US Treasury note, which represents short-term government securities and is backed by the Federal Reserve Board.
• Secured Overnight Funding Rate: This rate, which serves as a benchmark for all overnight cash lending, is replacing the London Interbank Offered Rate as the primary index for short-term loans.
• The 11th District Cost of Funds Index: This provides a weighted average of the rates banks pay on savings accounts and money they borrow from other institutions. 

On top of whichever index your ARM uses, your lending institution will set a margin. This margin is usually set for the life of your loan and added to your current rate when your loan adjusts. For instance, if the index is 1.5% and your lender's margin is 2%, your effective rate is 3.5%.

Adjustable-rate caps

These indexes can change significantly over time, which leaves you vulnerable to substantial rate swings. This risk is somewhat mitigated, however, by rate caps. These caps serve as guard rails that prevent your interest rate and loan payment from increasing too much.

Your adjustable-rate loan caps should be disclosed upfront and usually come in one of two forms:

• Periodic caps, which limit how much your rate can increase from one period to the next.
• Lifetime caps, which put a lid on how much your rate can go up over the life of the loan.

Although payment caps protect you from big rate hikes, they can also expose you to something dangerous: negative amortization. If the index rate is higher than your cap, your payment might not be large enough to cover the principal, and you could end up seeing your loan balance go up instead of down.

How introductory periods work

To truly understand adjustable-rate mortgages, it's important to get a handle on the nomenclature. 

With a 5/1 ARM, the five indicates your introductory period -- five years -- and the second number -- the one -- indicates the annual frequency with which your rate readjusts after the introductory period ends. For a 5/1 ARM with an introductory rate of 2.5% (0.5% index and 2% margin) and a 30-year term, your rate will be set at 2.5% for the first five years, after which it's eligible for adjustment once a year.

This means that you can count on a set payment for five years. In year six, if the index jumps to 2.5%, your new effective rate is 4.5%. For the remaining 25 years of your loan, your principal payment won't change, but your interest payment will increase. And that could add hundreds of dollars to your monthly payment.

Common types of adjustable-rate mortgages

There are a wide variety of ARMs on the market. Here's an overview of the most common ones:

Hybrid ARMs

These ARMs have both a fixed period and an adjustable period, as indicated in the example above. The first number indicates the fixed period (in years), and the second indicates how often the adjustable rate will be reviewed and updated. This adjustment time frame is usually one year but could be different (every six months or every five years, for example). Common types of hybrid ARMs include:

• 5/1 ARM: The most common ARM, this mortgage features an introductory five-year fixed-rate period after which your rate can be adjusted annually. 
• 7/1 ARM: This ARM has a seven-year fixed-rate introductory period, after which your adjustable-rate would change once a year for the duration of the loan.
• 10/1 ARM: This ARM has a 10-year fixed-rate introductory period, after which your adjustable-rate could change once a year for the duration of the loan.
• One-year ARM: This ARM has a one-year fixed-rate introductory period, after which your rate would adjust once a year for the duration of the loan. Right now, one-year ARMs are popular options for jumbo loans, particularly since current rates are at all-time lows.

Interest-only ARMs

These ARMs offer an introductory period during which you pay only interest while your principal balance stays the same. Often, you'll have a low monthly payment during the introductory period, but it could increase significantly once you're required to start paying off the principal -- especially if your rate increases at the same time.

Payment-option ARMs

These adjustable-rate mortgages offer considerable flexibility -- and risk. Lenders may offer several payment options, including paying interest and principal, only paying interest or making a minimum payment -- each with its own pros and cons. Some lenders may let you select a different payment option each month. Unpaid interest on these types of loans can add up quickly, however, putting you at risk of negative amortization. 

FHA ARM Loans

You don't need a conventional loan to opt for an ARM. FHA loans, which are backed by the Federal Housing Administration, are also available in various hybrid formats. These loans are typically used for first-time homebuyers and can be a good option if you can't afford a 20% down payment or have poor credit. FHA ARMs are available as one-year ARMs, as well as 3/1, 5/1, 7/1 and 10/1 options.

Reasons to consider an adjustable-rate mortgage 

Despite the risks, an ARM can be a good option for some home buyers. They offer several advantages:

• Lower interest rates than fixed-rate mortgages: The difference varies based on market conditions, but you're likely to get a lower initial rate on an ARM than a 30-year, fixed-rate mortgage. When fixed rates are high, ARMs can make for a compelling alternative.
• Flexibility: If you know you're not going to be in a home for the long haul, you can take advantage of a low introductory rate and then refinance or sell before you reach the adjustment period.
• Low introductory payments: Locking in a low monthly payment for five years (or more) can free up funds for other purposes. And if you expect to earn a higher salary in the future, a higher monthly payment in the future may be less daunting.
• Rates and monthly payments may decrease: There's always the chance that your rate and payment could go down -- though that's more likely if you bought or refinanced your home at a time when rates were high.

Reasons to avoid an adjustable-rate mortgage

While ARMs offer some material benefits, the risks are significant. (In fact, ARMs played a role in the 2008 financial crisis, before which they were marketed to homebuyers who did not understand the risks. The good news is ARMs are more tightly regulated now and that the riskiest versions have been retired. 

"The two big ways ARMs have changed since the mortgage crisis is in product and prevalence," says Swaleh. "Prior to the 2008-2011 collapse, ARMs made up a sizable portion of all mortgages originated. Today, they do not. In 2020, my team did 540 loan transactions. Not a single one of them was an ARM. As far as products go, the two most dangerous products (interest-only and negative-amortization loans) are far less available."

Still, there are some serious disadvantages to consider before taking on an ARM:

• Monthly payments can increase: This is the most obvious risk you're taking with an ARM, and it can be significant -- even if your loan has caps. Make sure you understand your ARM's indexes and caps so you can calculate potential future payments.
• Negative amortization: As noted, payment caps can create a dangerous situation in which your loan balance can actually increase if you're not paying enough toward the principal.
• Difficult to build into a budget: You may have good reason to believe that your income will increase or rates will go down, but if 2020 taught us anything, it's that nobody can perfectly predict what will happen in the next few years. Could you handle a payment increase even without a raise? Do you have money saved in case you were to lose your job or take in less income? If not, then you may want to think twice about an ARM.
• Prepayment penalties: Some ARMs have prepayment penalties to prevent you from paying any extra principal or paying off the loan in advance. Be sure to ask your lender about any payment penalties before you sign off on a loan.
• Complicated fee structure: Some lenders structure their ARMs with complicated discount points that provide an even lower rate initially. Some ARMs also have origination fees, funding fees, and other costs associated with this type of mortgage product that you should talk to your lender about. This fee structure can further obscure the actual cost of your loan and make it harder to know if you're really getting a good deal.

How to apply for an adjustable-rate mortgage

If you decide to apply for an ARM, you'll find the steps are basically the same as they would be for any loan, but you should proceed with a little extra caution.

1. First, review your credit and clean up any errors. If you need to improve your credit to increase your chances of locking in a better introductory rate, you may want to wait a few months.
2. Determine what you can afford in terms of money down and monthly payments. Remember that the latter can change with an ARM, so be sure you are planning with this in mind.
3. Get loan estimates from several lenders so you can compare rates, fees and closing costs. If you apply with several lenders within a short period (usually 30 days or less), the credit checks won't count as multiple inquiries on your credit report.
4. Ask lenders about important aspects of ARM loans such as rate caps, negative amortization, discount points and the index used to determine your rate. Make sure you have all of this information before moving forward.
5. Compare ARM terms to your fixed-rate options. Even if you're convinced an ARM is the best option for you, it's always helpful to explore all of your options before making a large financial decision.
6. Get preapproved for an ARM. Next, you'll want to begin the application process and get preapproved so you can determine how much house you can comfortably afford.
7. Finalize your ARM paperwork. Once you've been preapproved and decided on a lender, it's time to select the product that's best for your financial situation and sign your loan paperwork.

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