Mortgage interest rates take a big leap up

Mortgage rates rose for all types of loans compared to a week ago.

Mortgage rates rose for all types of loans compared to a week ago. Rates for 30-year fixed, 15-year fixed, 5/1 ARMs and jumbo loans increased.

The average rate for the benchmark 30-year fixed mortgage is 3.34 percent, up 10 basis points over the last seven days. This time a month ago, the average rate on a 30-year fixed mortgage was lower, at 3.09 percent.

At the current average rate, you’ll pay $440.16 per month in principal and interest for every $100,000 you borrow. That’s an increase of $5.50 over what you would have paid last week.

Standard lending practices defer to the 30-year, fixed-rate mortgage as the go-to for most borrowers because it allows the borrower to spread payments out over 30 years, keeping their monthly payment lower.

With a 15-year mortgage, however, borrowers are able to pay off their loan in half the time - if they’re able and willing to expand the amount of their monthly loan payment. The primary difference between qualifying for a 15-year versus a 30-year mortgage is that you’ll need a higher income and lower debt-to-income ratio to obtain a 15-year mortgage because the monthly loan payments are loftier.

The average rate you’ll pay for a 15-year fixed mortgage is 2.54 percent, up 6 basis points over the last week.

Monthly payments on a 15-year fixed mortgage at that rate will cost around $669 per $100,000 borrowed. That may squeeze your monthly budget than a 30-year mortgage would, but it comes with some big advantages: You’ll come out several thousand dollars ahead over the life of the loan in total interest paid and build equity much faster.

The average rate on a 5/1 ARM is 3.10 percent, rising 3 basis points since the same time last week.

Adjustable-rate mortgages, or ARMs, are mortgage loans that come with a floating interest rate. To put it another way, the interest rate can change from time to time throughout the life of the loan, unlike fixed-rate mortgages. These loan types are best for people who expect to sell or refinance before the first or second adjustment. Rates could be substantially higher when the loan first adjusts, and thereafter.

Monthly payments on a 5/1 ARM at 3.10 percent would cost about $427 for each $100,000 borrowed over the initial five years, but could climb hundreds of dollars higher afterward, depending on the loan’s terms.

The average jumbo mortgage rate today is 3.37 percent, up 10 basis points over the last week. A month ago, the average rate for jumbo mortgages was below that, at 3.13 percent.

At today’s average rate, you’ll pay a combined $441.82 per month in principal and interest for every $100k you borrow. That’s an additional $5.52 per $100,000 compared to last week.

In summary: How interest rates have moved

-          30-year fixed mortgage rate: 3.34 percent, up from 3.24 percent last week, +0.10

-          15-year fixed mortgage rate: 2.54 percent, up from 2.48 percent last week, +0.06

-          5/1 ARM mortgage rate: 3.10 percent, up from 3.07 percent last week, +0.03

-          Jumbo mortgage rate: 3.37 percent, up from 3.27 percent last week, +0.10