Today’s mortgage and refinance rates: January 1, 2022

Mortgage rates are still low in early 2022 but may increase later

Mortgage rates remain low today. Adjustable rates have started to go down over the last few months, so they’re more competitive with fixed rates than they have been in over a year. When you apply for a mortgage or refinance, you may want to look at both fixed-rate and adjustable-rate options.

As adjustable rates have dropped, fixed rates have gone up a little in the past couple of months. Here are the trends of fixed and adjustable rates over the last 12 months, according to data from Freddie Mac:

Adjustable rates were higher than the 30-year fixed rates in early 2021, but now they are steadily going down. Fixed rates are still low, though, and you could lock in a low rate for the entire life of your loan rather than risk your rate increasing later.

Mortgage rates today

Mortgage refinance rates today

Mortgage calculator

You can plug today's mortgage interest rates into our free mortgage calculator to see how different rates will impact your monthly payments.

You can plug today's mortgage interest rates into our free mortgage calculator to see how different rates will impact your monthly payments.

How do mortgage rates work?

A mortgage interest rate is the fee a lender charges for borrowing money, expressed as a percentage. For example, you get a mortgage for $200,000 with an interest rate of 2.75%.

Mortgage rates can be either fixed or adjustable. A fixed-rate mortgage keeps your rate the same for the entire length of your loan. An adjustable-rate mortgage locks in your rate for the first few years or so, then changes it periodically. With a 7/1 ARM, your rate would stay steady for the first seven years, then shift annually.

The longer your mortgage term, the higher your rate will be. For instance, you'll pay more on a 30-year mortgage than a 15-year mortgage. Longer terms do come with lower monthly payments, though, because you're spreading out the repayment process.

How do I get the best mortgage rate?

Here are a few steps you can take to get the lowest mortgage rate possible:

• Consider fixed vs. adjustable rates. You may be able to get a lower introductory rate with an adjustable-rate mortgage, which can be good if you plan to move before the intro period ends. But a fixed rate could be better if you're buying a forever home because you won't risk your rate going up later. Look at the rates your lender offers and weigh your options.
• Look at your finances. The stronger your financial situation, the lower your mortgage rate should be. Look for ways to boost your credit score or lower your debt-to-income ratio, if necessary. Saving for a higher down payment also helps.
• Choose the right lender. Each lender charges different mortgage rates. Picking the right one for your financial situation will help you land a good rate.