Today's Mortgage Rates & Trends - January 25, 2022: Rates ease

Mortgage rates dip slightly, after double-digit increases last week

Mortgage rates fell modestly Monday, easing further off the peak they hit last Wednesday. Averages have generally bolted higher in the new year, taking most loan types to their highest levels since early in the pandemic.

National Averages of Lenders' Best Rates
Loan Type Purchase Refinance
30-Year Fixed 3.74% 3.86%
FHA 30-Year Fixed 3.65% 3.88%
Jumbo 30-Year Fixed 3.51% 3.55%
15-Year Fixed 2.93% 3.05%
5/1 ARM 2.53% 2.82%
National averages of the lowest rates offered by more than 200 of the country's top lenders, with a loan-to-value ratio (LTV) of 80%, an applicant with a FICO credit score of 700-760, and no mortgage points.
2022.01.20 mort ranges

Today's National Mortgage Rate Averages

After climbing by double digits during the first half of last week, mortgage rates have since given up ground. The 30-year fixed-rate average shed three basis Monday to 3.74%, though that's still 35 basis points more expensive than its top average of 2021, as well as the highest level we've seen since spring 2020.

Rates on 15-year loans have generally followed a similar path this year, though they dipped more substantially Monday, losing seven points to move back under the 3-percent threshold. Still, the 15-year average is also the highest we've seen since the early days of the pandemic.

Meanwhile, the Jumbo 30-year average has shown fewer dramatic surges this year, and is still sitting close to last year's high-water mark. The average dropped two points Monday to 3.51%, which is just above 2021's high of 3.47%.

Compare that to early August, when a major rate dip took most averages to five-month lows. Today's rates are substantially higher, with the 30-year average 85 basis points more expensive, while the 15-year and Jumbo 30-year averages are up 72 and 45 points, respectively.

Refinance rates behaved roughly similarly Monday, with the 30-year average shedding two points, the 15-year declining five points, and Jumbo 30-year rates remaining flat. Like new purchase rates, the 30-year and 15-year refinance averages have moved substantially above their 2021 highs, while the Jumbo 30-year refinance average is still almost a quarter of a percentage point cheaper. Friday's cost to refinance fixed-rate loans was 4 to 12 points higher than new purchase loans.

Important:

The rates you see here generally won’t compare directly with teaser rates you see advertised online, since those rates are cherry-picked as the most attractive. They may involve paying points in advance, or may be selected based on a hypothetical borrower with an ultra-high credit score or taking a smaller-than-typical loan given the value of the home.

National Averages of Lenders' Best Rates - New Purchase
Loan Type New Purchase Daily Change
30-Year Fixed 3.74% -0.03
FHA 30-Year Fixed 3.65% -0.02
VA 30-Year Fixed 3.69% +0.02
Jumbo 30-Year Fixed 3.51% -0.02
20-Year Fixed 3.45% -0.05
15-Year Fixed 2.93% -0.07
Jumbo 15-Year Fixed 3.19% -0.12
10-Year Fixed 2.89% -0.07
10/1 ARM 2.69% -1.17
10/6 ARM 4.24% +0.28
7/1 ARM 2.68% -0.99
Jumbo 7/1 ARM 2.48% -0.05
7/6 ARM 4.24% +0.17
Jumbo 7/6 ARM 2.78% No Change
5/1 ARM 2.53% -0.67
Jumbo 5/1 ARM 2.32% -0.05
5/6 ARM 4.01% +0.15
Jumbo 5/6 ARM 2.81% +0.01
National Averages of Lenders' Best Rates - Refinancing
Loan Type Refinance Daily Change
30-Year Fixed 3.86% -0.02
FHA 30-Year Fixed 3.88% No Change
VA 30-Year Fixed 4.07% +0.02
Jumbo 30-Year Fixed 3.55% No Change
20-Year Fixed 3.61% -0.07
15-Year Fixed 3.05% -0.05
Jumbo 15-Year Fixed 3.37% -0.13
10-Year Fixed 3.01% -0.04
10/1 ARM 2.99% -1.11
10/6 ARM 4.45% +0.20
7/1 ARM 2.98% -0.90
Jumbo 7/1 ARM 2.77% -0.05
7/6 ARM 4.60% +0.29
Jumbo 7/6 ARM 3.05% No Change
5/1 ARM 2.82% -0.91
Jumbo 5/1 ARM 2.62% -0.05
5/6 ARM 4.12% +0.12
Jumbo 5/6 ARM 2.93% +0.01

Lowest Mortgage Rates by State

The lowest mortgage rates available vary depending on the state where originations occur. Mortgage rates can be influenced by state-level variations in credit score, average mortgage loan term, and size, as well as individual lenders' varying risk management strategies.

These rates are surveyed directly from over 200 top lenders.

What Causes Mortgage Rates to Rise or Fall?

Mortgage rates are determined by a complex interaction of macroeconomic and industry factors, such as the level and direction of the bond market, including 10-year Treasury yields; the Federal Reserve's current monetary policy, especially as it relates to funding government-backed mortgages; and competition between lenders and across loan types. Because fluctuations can be caused by any number of these at once, it's generally difficult to attribute the change to any one factor.

Macroeconomic factors have kept the mortgage market relatively low for much of this year. In particular, the Federal Reserve has been buying billions of dollars of bonds in response to the pandemic's economic pressures, and continues to do so. This bond-buying policy (and not the more publicized federal funds rate) is a major influencer on mortgage rates.

On Dec. 15, the Fed announced that, in light of stronger and more persistent inflation pressure than originally expected, it will speed up its timeline for throttling Fed bond buying, reducing the amount they purchase by a larger increment each month than initially planned. This so-called taper began in late November.

The Fed's rate and policy committee, called the Federal Open Market Committee (FOMC), meets every 6-8 weeks. Their next scheduled meeting will be held Jan. 25-26.

Methodology

The national averages cited above were calculated based on the lowest rate offered by more than 200 of the country's top lenders, assuming a loan-to-value ratio (LTV) of 80% and an applicant with a FICO credit score in the 700-760 range. The resulting rates are representative of what customers should expect to see when receiving actual quotes from lenders based on their qualifications, which may vary from advertised teaser rates.

For our map of the best state rates, the lowest rate currently offered by a surveyed lender in that state is listed, assuming the same parameters of an 80% LTV and a credit score between 700-760.