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Today's Mortgage Rates | December 29, 2021

By: Samantha Sharf
Samantha Sharf, Editor at Money
Samantha Sharf
Editor | Joined May 2020
Samantha Sharf is Money's real estate editor. She previously wrote about amazing homes and billion-dollar real estate entrepreneurs for Forbes.
See full bio
Published: Dec 29, 2021 10 min read
Money; Getty Images

Mortgage rates are trending lower today.

Any rate reduction is good news for borrowers. Rates remain very low historically speaking. Borrowers with strong credit can still find attractive rates and low monthly payments on a new mortgage or when refinancing an existing loan.

  • The latest rate on a 30-year fixed-rate mortgage is 3.631%. ⇓
  • The latest rate on a 15-year fixed-rate mortgage is 2.553%. ⇓
  • The latest rate on a 5/1 ARM is 3.358%. ⇔
  • The latest rate on a 7/1 ARM is 3.27%. ⇓
  • The latest rate on a 10/1 ARM is 3.334%. ⇑

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

Today's 30-year fixed-rate mortgage rates

  • The 30-year rate is 3.631%.
  • That's a one-day decrease of 0.046 percentage points.

The 30-year fixed-rate mortgage is the most popular home loan in America. Borrowers like the long payback time because it means the monthly payments are relatively low. The fixed rate means monthly payments will never change, which is helpful for planning and a hedge against inflation. The downsides of a 30-year loan are that the interest rate tends to be higher than on a shorter-term loan. This means you'll pay more for a 30-year loan over time.

Today's 15-year fixed-rate mortgage rates

  • The 15-year rate is 2.553%.
  • That's a one-day decrease of 0.036 percentage points

The interest rate on a 15-year fixed-rate mortgage tends to be lower than on a 30-yer loan. This makes the shorter-term more economical in the long run. However, the monthly payments will be higher so do not work for everyone.

The latest rates on adjustable-rate mortgages

  • The latest rate on a 5/1 ARM is 3.358%. ⇔
  • The latest rate on a 7/1 ARM is 3.27%. ⇓
  • The latest rate on a 10/1 ARM is 3.334%. ⇑

Adjustable-rate mortgages generally offer low interest rates for the first several years after your take out the loan. Once the adjustable period begins, however, the rate can go up — sometimes substantially. For example, a 5/1 ARM will have a fixed rate for five years before it starts to change annually. Most people who opt for an ARM plan to move or refinance before the fixe-rate period ends.

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 3.3%.⇓
  • The rate on a 30-year VA mortgage is 3.394%. ⇓
  • The rate on a 30-year jumbo mortgage is 3.691%. ⇑

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 3.818%. ⇓
  • The refinance rate on a 15-year fixed-rate refinance is 2.661%. ⇓
  • The refinance rate on a 5/1 ARM is 3.419%. ⇑
  • The refinance rate on a 7/1 ARM is 3.387%. ⇑
  • The refinance rate on a 10/1 ARM is 4.011%. ⇔

Where are mortgage rates heading this year?

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

Looking ahead,experts believe interest rates will rise more in 2022, but also modestly. Factors that could influence rates include continued economic improvement and more gains in the labor market. The Federal Reserve has also begun tapering its purchase of mortgage-backed securities and announced it anticipates raising 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 should stay near historically low levels through the first half of the year, rising slightly later in the year. Even with rising rates, it will still be a favorable time to finance a new home or refinance a mortgage.

Factors that influence mortgage rates include:

  • The Federal Reserve. The Fed took swift action when the pandemic hit the United States in March of 2020. The Fed announced plans to keep money moving through the economy by dropping the short-term Federal Fund interest rate to between 0% and 0.25%, which is as low as they go. The central bank also pledged to buy mortgage-backed securities and treasuries, propping up the housing finance market but began cutting back those purchases in November.
  • The 10-year Treasury note. Mortgage rates move in lockstep with the yields on the government’s 10-year Treasury note. Yields dropped below 1% for the first time in March 2020 and have been rising since then. On average, there is typically a 1.8 point “spread” between Treasury yields and benchmark mortgage rates.
  • The broader 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 low, it means the economy is weak, which can push interest rates down. Thanks to the pandemic, unemployment levels reached all-time highs early last year and have not yet recovered. GDP also took a hit, and while it has bounced back somewhat, there is still a lot of room for improvement.

Tips for getting the lowest mortgage rate possible

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

Check your credit score and credit report. Errors or other red flags may be dragging your credit score down. Borrowers with the highest credit scores are the ones who will get the best rates, so checking your credit report before you start the house-hunting process is key. Taking steps to fix errors will help you raise your score. If you have high credit card balances, paying them down can also provide a quick boost.

Save up money for a sizeable down payment. This will lower your loan-to-value ratio, which means how much of the home’s price 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 you have the money to finance the home purchase.

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

Also. take time to find out about different loan types. While the 30-year fixed-rate mortgage is the most common type of mortgage, consider a shorter-term loan like a 15-year loan 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 one best fits your needs and financial situation. Government loans — such as those backed by the Federal Housing Authority, the Department of Veterans Affairs and the Department of Agriculture — can be more affordable options for those who qualify.

Finally, lock in your rate. Locking your rate once you’ve found the right rate, loan product and lender will help guarantee your mortgage rate won’t increase before you close on the loan.

Our mortgage rate methodology

Money’s daily mortgage rates show the average rate offered by over 8,000 lenders across the United States the most recent business day rates are available for. Today, we are showing rates for Tuesday, December 28, 2021. Our rates reflect what a typical borrower with a 700 credit score might expect to pay for a home loan right now. These rates were offered to people putting 20% down and include discount points.

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Rates are subject to change. All information provided here is accurate as of the publish date.