Another chance to save: 20-year mortgage rates slide a quarter point | March 4, 2022

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Check out the mortgage rates for March 4, 2022, which are a mixed bag from yesterday. (Credible)

Based on data compiled by Credible, mortgage refinance rates are relatively unchanged since yesterday, except for 30-year rates, which inched down.

30-year fixed-rate refinance: 3.940%, down from 3.990%, -0.050
20-year fixed-rate refinance: 3.875%, unchanged
15-year fixed-rate refinance: 3.250%, unchanged
10-year fixed-rate refinance: 3.000%, unchanged

Rates last updated on March 4, 2022. These rates are based on the assumptions shown here. Actual rates may vary. With more than 4,500 reviews, Credible maintains an "excellent" Trustpilot score.

What this means: Homeowners looking to refinance have multiple opportunities to save today. Rates for a 30-year refinance, which is the most popular term, have remained below 4% for the past five days, and are ending the week lower than they began it. Homeowners who can swing a higher monthly payment might opt for a 10-year term to realize even more interest savings: Rates for this term are sitting at 3%.

Today’s mortgage rates for home purchases

Based on data compiled by Credible, mortgage rates for home purchases rose for 30-year terms, while rates for 20- and 15-year terms dropped since yesterday.

30-year fixed mortgage rates: 4.000%, up from 3.875%, +0.125
20-year fixed mortgage rates: 3.625%, down from 3.875%, -0.250
15-year fixed mortgage rates: 3.125%, down from 3.250%, -0.125
10-year fixed mortgage rates: 3.000%, unchanged

Rates last updated on March 4, 2022. These rates are based on the assumptions shown here. Actual rates may vary. Credible, a personal finance marketplace, has 4,500 Trustpilot reviews with an average star rating of 4.7 (out of a possible 5.0).

What this means: Homebuyers looking to save the most on interest might turn to shorter terms today. Rates for 20- and 15-year terms dropped after surging yesterday, meaning buyers may want to act now ahead of future increases. After a week of ups and downs, rates for 30-year terms inched back up to 4%. Shorter terms come with higher monthly mortgage payments, but buyers can save substantially on interest and pay off their mortgages sooner. Whichever term they opt for, buyers might want to consider locking in a rate today, before rates rise further as experts have predicted.

To find great mortgage rates, start by using Credible’s secured website, which can show you current mortgage rates from multiple lenders without affecting your credit score. You can also use Credible’s mortgage calculator to estimate your monthly mortgage payments.

How mortgage rates have changed over time

Today’s mortgage interest rates are well below the highest annual average rate recorded by Freddie Mac — 16.63% in 1981. A year before the COVID-19 pandemic upended economies across the world, the average interest rate for a 30-year fixed-rate mortgage for 2019 was 3.94%. The average rate for 2021 was 2.96%, the lowest annual average in 30 years.

The historic drop in interest rates means homeowners who have mortgages from 2019 and older could potentially realize significant interest savings by refinancing with one of today’s lower interest rates. When considering a mortgage or refinance, it’s important to take into account closing costs such as appraisal, application, origination and attorney’s fees. These factors, in addition to the interest rate and loan amount, all contribute to the cost of a mortgage.

Are you looking to buy a home? Credible can help you compare current rates from multiple mortgage lenders at once in just a few minutes. Use Credible’s online tools to compare rates and get prequalified today.

Thousands of Trustpilot reviewers rate Credible "excellent."

How Credible mortgage rates are calculated

Changing economic conditions, central bank policy decisions, investor sentiment, and other factors influence the movement of mortgage rates. Credible average mortgage rates and mortgage refinance rates reported in this article are calculated based on information provided by partner lenders who pay compensation to Credible.

The rates assume a borrower has a 740 credit score and is borrowing a conventional loan for a single-family home that will be their primary residence. The rates also assume no (or very low) discount points and a down payment of 20%.

Credible mortgage rates reported here will only give you an idea of current average rates. The rate you actually receive can vary based on a number of factors.

How much can I borrow for a mortgage?

It’s critical to have an idea of how much you can afford to borrow for a mortgage before you begin home shopping or make an offer on a house.

Generally, the 28/36 rule is a good measure of how much you can afford to borrow without strapping your finances. The rule states that your mortgage payment, including taxes and insurance, shouldn’t be more than 28% of your gross monthly income. And all your debts, including your mortgage and other monthly expenses like car and student loan payments, shouldn’t exceed 36% of your gross monthly income.

For example, if your gross monthly income is $6,250 (annual salary of $75,000), you should be able to afford a monthly payment of $1,750. And your total monthly debt load shouldn’t exceed $2,250.

A general rule of thumb is that you shouldn’t take out a mortgage that’s two to two and half times your gross annual income. So in the above scenario, the maximum you should borrow to buy a house would be $187,500.

Ultimately, lenders determine how much you can afford to borrow by weighing your income, debt, assets, credit, and other financial factors.

If you’re trying to find the right mortgage rate, consider using Credible. You can use Credible's free online tool to easily compare multiple lenders and see prequalified rates in just a few minutes.

Have a finance-related question, but don't know who to ask? Email The Credible Money Expert at moneyexpert@credible.com and your question might be answered by Credible in our Money Expert column.

As a Credible authority on mortgages and personal finance, Chris Jennings has covered topics that include mortgage loans, mortgage refinancing, and more. He’s been an editor and editorial assistant in the online personal finance space for four years. His work has been featured by MSN, AOL, Yahoo Finance, and more.