Interest rates

Mortgage interest rates in effect on December 2, 2021: Rate bulletin

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A few major mortgage rates have gone down today. Both 15-year and 30-year fixed mortgage rates have fallen. The average rate for the most common type of variable rate mortgage, the 5/1 variable rate mortgage, also trended downward. While mortgage rates are constantly changing, they are pretty low right now. If you are thinking of buying a home, this might be a great time to get a fixed rate. But as always, be sure to consider your personal goals and circumstances first before buying a home, and talk to multiple lenders to find a lender who can best meet your needs.

30-year fixed rate mortgages

The 30-year fixed mortgage rate average is 3.14%, down 5 basis points from a week ago. (One basis point equals 0.01%.) The most commonly used loan term is a 30-year fixed mortgage. A 30 year fixed rate mortgage will generally have a smaller monthly payment than a 15 year mortgage, but often a higher interest rate. While you’ll pay more interest over time – you pay off your loan over a longer period – 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-rate mortgage is 2.44%, down 2 basis points from a week ago. Compared to a 30-year fixed mortgage, a 15-year fixed mortgage with the same loan value and the same interest rate will have a higher monthly payment. However, if you can afford the monthly payments, a 15-year loan has several advantages. These typically include the ability to get a lower interest rate, pay off your mortgage sooner, and pay less total interest over the long term.

5/1 adjustable rate mortgages

A 5/1 ARM has an average rate of 3.13%, a decrease of 5 basis points from seven days ago. You will typically get a lower interest rate (compared to a 30-year fixed mortgage) with a 5/1 variable rate mortgage during the first five years of the mortgage. However, market fluctuations could cause your interest rate to increase after this period, as stated in your loan terms. For borrowers who are considering selling or refinancing their home before rates change, an adjustable rate mortgage may be a good option. But if it doesn’t, you might have to pay a much higher interest rate if market rates change.

Mortgage rate trends

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 in the United States:

Average mortgage interest rates

Product Rate Last week Switch
30 years fixed 3.14% 3.19% -0.05
15 years fixed 2.44% 2.46% -0.02
Giant 30-year mortgage rate 2.76% 2.80% -0.04
30-year mortgage refinancing rate 3.13% 3.16% -0.03

Prices as of December 2, 2021.

How To Shop For The Best Mortgage Rate

You can get a personalized mortgage rate by connecting with your local mortgage broker or by using an online calculator. When shopping for mortgage rates, consider your goals and current finances. Specific mortgage rates will vary based on factors such as credit rating, down payment, debt-to-income ratio, and loan-to-value ratio. Typically, you want a good credit score, higher down payment, lower DTI, and lower LTV to get a lower interest rate. Besides the interest rate, other factors including closing costs, fees, points of call, and taxes can also affect the cost of your home. Be sure to shop around with multiple lenders – for example, credit unions and online lenders in addition to local and state banks – to get a loan that’s right for you.

How does the term of the loan affect my mortgage?

An important consideration when choosing a mortgage loan is the length of the loan or the payment schedule. The most common loan terms are 15 years and 30 years, although there are also 10, 20 and 40 year mortgages. Mortgages are divided into fixed rate and variable rate mortgages. For fixed rate mortgages, interest rates are stable throughout the life of the loan. Unlike a fixed rate mortgage, the interest rates on a variable rate mortgage are only stable for a certain period of time (usually five, seven, or 10 years). After that, the rate changes every year based on the current interest rate in the market. When deciding between a fixed rate mortgage and an adjustable rate mortgage, you need to consider how long you plan to stay in your home. Fixed rate mortgages might be better suited if you plan to stay in a house for a while. Fixed rate mortgages offer more stability over time compared to variable rate mortgages, but variable rate mortgages may offer lower interest rates upfront. However, if you don’t plan on keeping your new home for more than three to ten years, an adjustable rate mortgage might give you a better deal. Generally, there is no better loan term; it all depends on your goals and your current financial situation. Make sure you do your research and think about your own priorities when choosing a mortgage.