Today’s Mortgage Rates Drop Below 4% | January 25, 2022


The interest rate on a 30-year fixed rate mortgage fell below 4% today, averaging 3.993%. The rate for a 30-year refinance loan is also lower at 4.119%. Almost every other loan category is also seeing lower rates, including the 5/1 Variable Rate Mortgage, which fell to 2.49%.

It’s the third day in a row that mortgage rates have fallen, which is good news for borrowers, whether they’re considering buying a home or refinancing an existing mortgage.

  • The last rate on a 30-year fixed rate mortgage is 3.993%.
  • The final rate on a 15-year fixed rate mortgage is 2.991%. ⇓
  • The latest rate on a 5/1 ARM is 2.49%. ⇓
  • The last rate on a 7/1 ARM is 2.767% ⇓
  • The latest rate on a 10/1 ARM is 2.835%. ⇓

Money’s daily mortgage rates reflect what a borrower with a 20% down payment and a credit score of 700 — roughly the national average score — could pay if he or she applied for a home loan right now. Each day’s rates are based on the average rate that 8,000 lenders offered applicants the previous business day. Freddie Mac weekly rates will generally be lower, as they measure the rates offered to borrowers with higher credit scores.

Are you looking for a loan? Check out Money’s lists of top mortgage lenders and top refinance lenders.

Today’s 30-Year Fixed Rate Mortgage Rates

  • The 30-year rate is 3.993%.
  • It’s a day offold by 0.019 percentage points.
  • It’s a month to augment by 0.377 percentage points.

The 30-year fixed rate mortgage is the most popular loan in America. Borrowers are attracted by the fact that the interest rate and monthly payments will not change during the term of the loan. The long payback period translates into lower payouts, which is another benefit. On the other hand, compared to a fixed rate loan with a shorter term, the interest rate will be higher, which will make it more expensive in the long term.

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Average mortgage rates

Data based on US mortgages closed on January 24, 2022

Type of loan January 24 Last week Change
15-year fixed conventional 2.99% 3.05% 0.06%
30-year fixed conventional 3.99% 4.03% 0.04%
ARM rate 7/1 2.77% 3.86% 1.09%
ARM rate 10/1 2.84% 4.11% 1.27%

Your actual rate may vary

15 years today fixed rate mortgage rates

  • The 15-year rate is 2.991%.
  • It’s a day offold by 0.043 percentage points.
  • It’s a month infold by 0.454 percentage points.

The advantages of a 15-year fixed rate mortgage are its short repayment period and lower interest rate than a 30-year mortgage. The downside is that monthly payments will be higher and may not be as affordable for most borrowers.

The latest rates of adjustable rate mortgages

  • The latest rate on a 5/1 ARM is 2.49%. ⇓
  • The latest rate on a 7/1 ARM is 2.767%. ⇓
  • The latest rate on a 10/1 ARM is 2.835%. ⇓

The interest rate on adjustable rate mortgages will actually be fixed for the first few years before starting to adjust at regular intervals. A 5/1 ARM, for example, will have a fixed rate for five years before beginning to adjust each year. This type of loan could be a good option for borrowers who plan to sell before the end of the fixed rate period because the initial interest rate is very low. Once the rate becomes adjustable, however, there could be a big increase and it may make sense to refinance.

The Latest VA, FHA, and Jumbo Loan Rates

The average rates for FHA, VA, and jumbo loans are:

  • The rate on a 30-year FHA mortgage is 3.781%. ⇓
  • The rate for a 30-year VA mortgage is 3.84%. ⇑
  • The rate for a 30-year jumbo mortgage is 3.601%. ⇔

The latest mortgage refinance rates

The average refinance rates for 30-year loans, 15-year loans and ARMs are:

  • The refinance rate on a 30-year fixed rate refinance is 4.119%. ⇓
  • The refinance rate on a 15-year fixed rate refinance is 3.112%. ⇓
  • The rollover rate on a 5/1 ARM is 2.787%. ⇓
  • The refinance rate on a 7/1 ARM is 3.064%. ⇓
  • The refinance rate on a 10/1 ARM is 3.135%. ⇓
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Average Mortgage Refinance Rates

Data based on US mortgages closed on January 24, 2022

Type of loan January 24 Last week Change
15-year fixed conventional 3.11% 3.17% 0.06%
30-year fixed conventional 4.12% 4.14% 0.02%
ARM rate 7/1 3.06% 4.01% 0.95%
ARM rate 10/1 3.14% 4.26% 1.12%

Your actual rate may vary

Where are mortgage rates going this year?

Mortgage rates have fallen through 2020. Millions of homeowners have responded to low mortgage rates by refinancing existing loans and taking out new ones. Many people bought homes they might not have been able to afford if rates were higher. In January 2021, rates briefly fell to lowest levels on record, but rose slightly for the rest of the year.

Looking ahead, experts believe that interest rates will rise further in 2022, but also modestly. Factors that could affect rates include continued economic improvement and further labor market gains. The Federal Reserve also began to scale back its purchases of mortgage-backed securities and announced plans to raise the federal funds rate three times in 2022 to combat rising inflation.

While mortgage rates are likely to rise, experts say the increase won’t happen overnight and it won’t be a dramatic jump. Rates are expected to remain near historic lows throughout the first half of the year, rising slightly later in the year. Even with rising rates, it will still be a good time to finance a new home or refinance a mortgage.

Factors that influence mortgage rates include:

  • The Federal Reserve. The Fed acted quickly when the pandemic hit the United States in March 2020. The Fed announced its intention to keep money flowing in the economy by lowering the Federal Fund short-term interest rate between 0% and 0.25%, which is also low as you go. The central bank also pledged to buy mortgage-backed securities and treasury bills, supporting the housing finance market, but began to scale back those purchases in November.
  • The 10-year Treasury bond. Mortgage rates keep pace with government 10-year Treasury bond yields. Yields first fell below 1% in March 2020 and have since risen. On average, there is typically a 1.8 point “spread” between Treasury yields and benchmark mortgage rates.
  • The wider economy. Unemployment rates and changes in gross domestic product are important indicators of the overall health of the economy. When employment and GDP growth are weak, it means the economy is weak, which can lower interest rates. Thanks to the pandemic, unemployment levels reached historic highs early last year and have yet to recover. GDP has also taken a hit, and although it has rebounded somewhat, there is still plenty of room for improvement.

Tips for getting the lowest possible mortgage rate

There is no universal mortgage rate that all borrowers receive. Qualifying for the lowest mortgage rates takes some work and will depend on both personal financial factors and market conditions.

Check your credit score and your credit report. Mistakes or other red flags can lower your credit score. Borrowers with the highest credit scores are the ones who will get the best rates, so it’s essential to check your credit report before you begin the home hunting process. Taking steps to correct mistakes will help increase your score. If you have high credit card balances, paying them off can also give you a quick boost.

Save money for a large down payment. This will lower your loan-to-value ratio, which is the share of the house price that the lender has to finance. A lower LTV usually translates to a lower mortgage rate. Lenders also like to see money that has been saved in an account for at least 60 days. It tells the lender that you have the money to finance the home purchase.

Shop around for the best rate. Don’t settle for the first interest rate a lender offers you. Check with at least three different lenders to see who offers the lowest interest rate. Also consider different types of lenders, such as credit unions and online lenders in addition to traditional banks.

As well. take the time to learn about the different types of loans. Although the 30-year fixed rate mortgage is the most common type of mortgage, consider a shorter-term loan such as a 15-year mortgage or an adjustable rate mortgage. These types of loans often come with a lower rate than a conventional 30-year mortgage. Compare the costs of all to see which best suits your needs and financial situation. Government loans — such as those backed by the Federal Housing Authority, Department of Veterans Affairs, and Department of Agriculture — may be more affordable options for those who qualify.

Finally, lock in your rate. Locking in your rate once you’ve found the right rate, the right loan product, and the right lender will help ensure that your mortgage rate doesn’t increase until the loan is closed.

Our mortgage rate methodology

Money’s Daily Mortgage Rates show the average rate offered by more than 8,000 lenders across the United States for which the most recent rates are available. Today we are posting rates for Monday, January 24, 2022. Our rates reflect what a typical borrower with a credit score of 700 might expect to pay for a home loan right now. These rates were offered to people depositing 20% ​​deposit and include discount points.

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