When Will Mortgage Rates Stop Climbing?
Mortgage rates have been rising at a rapid pace. Will things slow down?
Mortgage rates were nice and low from mid-2020 through late 2021. But things changed at the start of 2022, and now, it seems like mortgage rates are on a rampage, going nowhere but up.
Here's a summary of mortgage rates for April 18:
Mortgage Type | Today's Interest Rate |
---|---|
30-year fixed mortgage | 5.183% |
20-year fixed mortgage | 4.964% |
15-year fixed mortgage | 4.347% |
5/1 ARM | 3.933% |
30-year mortgage rates
The average 30-year mortgage rate today is 5.183%, up from 5.167% on Friday. If you sign a 30-year loan, you'll enjoy lower monthly payments than with a shorter-term loan, but you'll pay more interest over time.
20-year mortgage rates
The average 20-year mortgage rate today is 4.964%, up from 4.885% on Friday. You'll get a lower interest rate on a 20-year loan than with a 30-year loan, but your monthly payments will be higher because you're repaying your mortgage in less time.
15-year mortgage rates
The average 15-year mortgage rate today is 4.347%, up from 4.315% on Friday. Over time, you'll spend less on interest with a 15-year loan than a longer-term loan, so a 15-year loan could make sense if you can swing the higher monthly payments that come with it.
5/1 ARMs
The average 5/1 ARM rate is 3.933%, down a bit from 3.954% on Friday. With a 5/1 ARM, you could save some money on your monthly mortgage payments initially compared to a 30-year loan. But be careful -- if your interest rate on a 5/1 ARM starts out low, it could climb over time, leaving you with higher monthly payments.
When will mortgage rates stop rising so sharply?
At the start of the year, the average 30-year mortgage was under 4%. Now, it's well over 5%. In fact, even the average 20-year loan is on the cusp of 5%.
Unfortunately, mortgage rates are likely to keep climbing this year due to plans on the part of the Federal Reserve to implement several rate hikes of its own. Plus, rates sat at such low levels for so many consecutive months that they were bound to rise at some point -- but the pace at which they've been climbing may be starting to spook buyers.
It's hard to say when mortgage rates will start to slow down, but we could be in for an expensive borrowing year. At a time when home values are high, that's something buyers will need to reconcile.
Anyone looking for a mortgage this year should definitely shop around with different mortgage lenders. Snagging even a slightly better deal on a home loan could go a long way at a time when borrowing has gotten so surprisingly expensive.
Our Research Expert
We're firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. Motley Fool Money does not cover all offers on the market. Motley Fool Money is 100% owned and operated by The Motley Fool. Our knowledgeable team of personal finance editors and analysts are employed by The Motley Fool and held to the same set of publishing standards and editorial integrity while maintaining professional separation from the analysts and editors on other Motley Fool brands.
Related Articles
View All Articles