Mortgage rates for Jan. 27, 2022: Rates jump after FOMC meeting
Yesterday was a big day for the mortgage industry. Economists have had Jan. 26 circled on their calendars for weeks, waiting to see what — if any — new developments would come out of the Federal Reserve Open Markets Committee (FOMC) meeting. If you had money on “nothing much at all,” then you’d be right.
As we reported yesterday, the FOMC meeting came and went without a federal funds rate increase. However, the Fed did indicate that a rate hike could be coming down the pike relatively soon, citing inflation as a key concern.
Since federal funds rates are staying flat for now, that must mean mortgage rates are following suit, right? Not quite. Even without an immediate rate hike, the Fed reiterated its commitment to increasing rates sometime soon. Bond markets have responded, with prices on mortgage-backed securities (MBS) ticking upward throughout the morning.
Given all of that, it may come as no surprise that Rate’s mortgage rates are up across the board today, Jan. 27, 2022. While delaying a refi or home loan until rates dip back down may seem like the financially prudent move to make, keep in mind that there’s no way to know when — or if — that will happen. Rather than waiting for a rate drop that may never come around, locking in your rate today could wind up delivering more favorable loan terms.
30-year fixed rate
First, the good news: Interest rates on 30-year fixed rate loans haven’t changed week over week (WOW). The bad news: Rates have increased both day over day (DOD) and month over month (MOM). If you match our borrower profile listed below, that means your mortgage payment on this type of loan would wind up being $1,368.15.*
- Today’s rate: 3.625%
- DOD change: up 15 basis points **
- WOW change: 0
- MOM change: up 50 basis points
- Today’s APR: 3.724%
- DOD change: up 15.2 basis points
- WOW change: 0
- MOM change: up 50.5 basis points
15-year fixed rate
Rate movement on 15-year fixed rate loans has been practically identical to 30-year home loans. Mortgage rates are up both day over day and month over month, but unchanged from last week. As of now, you’d spend $2,053.76* on your monthly mortgage payment.
- Today’s rate: 2.850%
- DOD change: up 12.5 basis points
- WOW change: 0
- MOM change: up 50 basis points
- Today’s APR: 3.045%
- DOD change: up 12.7 basis points
- WOW change: 0
- MOM change: up 50.6 basis points
FHA 30-year fixed rate
Government-insured home loans have fared even worse today. Looking at FHA 30-year fixed rate loans, you’ll notice that rates are higher now than they were yesterday, last week or last month. Even with that increase, though, the interest rate on an FHA 30-year fixed rate loan is still lower than a conventional fixed rate mortgage with the same loan length. With our current lending terms, your mortgage payment would be $1,347.13%.*
- Today’s rate: 3.5%
- DOD change: up 12.5 basis points
- WOW change: up 12.5 basis points
- MOM change: up 37.5 basis points
- Today’s APR: 4.294%
- DOD change: up 12.9 basis points
- WOW change: up 12.9 basis points
- MOM change: up 38.6 basis points
10-year ARM
Adjustable rate mortgages (ARMs) have seen the largest rate spike today. Interest rates on 10-year ARMs are up day over day, week over and month over month. Not only that, but the current rate actually matches 30-year fixed rate loans, which is somewhat unusual for an ARM. If you locked in your rate now, you’d pay $1,368.15* each month on a 10-year ARM.
- Today’s rate: 3.625%
- DOD change: up 25 basis points
- WOW change: up 12.5 basis points
- MOM change: up 75 basis points
- Today’s APR: 3.382%
- DOD change: up 15.7 basis points
- WOW change: down 7.9 basis points
- MOM change: up 46.5 basis points
Today’s takeaway
Even though yesterday’s FOMC meeting seemed a bit anticlimactic, with no immediate federal funds rate increase, it still impacted mortgage rates today, Jan. 27, 2022. Interest rates have gone up for every major loan type, with ARM loans seeing the biggest surges.
The Fed has done just about everything it can to tip its hand as far as what it’ll do next. It seems like a foregone conclusion that a rate hike will happen — and soon. Many economists predict that the next big rate spike could come as early as March 2022.
With that in mind, it’s a good idea to continue watching daily mortgage rate activity so you can get ahead of any impending rate increase. If you’re ready to lock in your rate on a refi or new home loan, reach out to a mortgage expert to get started.
Disclaimer
*Above scenarios assume a first lien position, 40 day rate lock on a primary residence and are subject to change without notice. Subject to underwriting guidelines and applicant’s credit profile. The actual interest rate, APR and payment may vary based on the specific terms of the loan selected, verification of information, your credit history, the location and type of property, and other factors as determined by Lender. Contact Rate for more information and up to date rates
**Basis points measure the percentage change on interest rates. One basis point represents a 0.01% shift.
Interest rates are based on a borrower profile fitting the following criteria:
- Zip code: 60031
- Home type: Single-family house
- Purchase price: $375,000
- Down payment: 20% ($75,000)
- Mortgage balance: $300,000
- FICO score: 740+
- Military member: No
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