DENVER, CO – A new report indicates that home mortgages, after a significant amount of time of steady increases in response to the ongoing inflation plaguing the country, have shown substantial decreases recently for the first time in months, with all current loan types – despite various increases and decreases between them overall – currently below 6 percent as of this week.
The interest rate for a 30-year fixed mortgage is 5.990 percent, which represents a 0.010 decrease from 6.000 percent; 20-year fixed mortgage rates have dropped 0.125 percent to 5.750 percent; The rates for 15-year fixed mortgages have increased 0.500 to 5.125 percent, up from 5.625 percent; and Rates for 10 year fixed mortgages increased 0.375 to 5.500 percent, up from 5.125 percent.
Home mortgage rates were last updated on April 10, 2023, and due to the fact that they all currently reside at under 6 percent, experts say those looking to purchase a house while maximizing their savings should give serious consideration to 10-year terms, considering that they currently have the lowest rate available. However, if borrowers are looking for a smaller monthly payment, experts say they should consider 20-year rates, as they are currently lower by quarter of a percentage point than 30-year rates.
That being said, the current rates referenced above are assumptions based on current market conditions, with actual real-world rates likely to vary from lender to lender; home buyers are encouraged to view mortgage rates from multiple lenders in order to be able to estimate monthly mortgage payments and find a loan that’s right for their individual financial circumstances.
In contrast to home mortgage rates, mortgage refinance rates increased across all key terms last week. 30-year fixed rate refinance loan rates jumped 0.365 to 5.990 percent, up from 5.625 percent; 20-year fixed rate refinance rates climbed to 5.990 percent, increasing 0.365 from 5.625 percent; 15-year fixed rate refinances are now 5.250 percent, up 0.260 from 4.990 percent; and 10-year fixed rate refinance rates increased 0.250 from 5.000 percent, and are currently residing at 5.250 percent.
As with home mortgage rates, mortgage refinance rates were last updated on August 10, 2023.
Homeowners who are looking to refinance into a lower monthly payment, according to experts, should look into 20-year rates, as they are currently lower than 30-year rates by a quarter of a percentage point. However, those who are looking to save the most money possible should consider 10 or 15-year terms, given the fact they currently have the lowest rate available today.
Prior to the COVID-19 pandemic and the havoc it played with global economies, the average interest rate for a 30-year fixed rate mortgage in 2019 was 3.94 percent. In the midst of the pandemic, interest rates dropped to their lowest rates in 30 years, hitting 2.96 percent in 2021 before escalating inflation drove rates as high as 7 percent or more, causing demand for home mortgages to decrease drastically due to increased borrowing costs.
This week’s drop in interest rates should interest homeowners who have mortgages from 2019 and older, as they could potentially benefit from significant interest savings by refinancing. Those looking into acquiring a mortgage or a refinancing loan should take into account closing costs including appraisal, application, origination, and attorney’s fees, factors that – in addition to the interest rate and loan amount – contribute to the cost of a mortgage.
The current rates make the assumption that a borrower has a credit score of 700 and is borrowing a conventional loan for a single-family home that will constitute their primary residence. Factors such as credit score, debt to income ratio, down payment amount, and home location and price can affect the mortgage interest rate that a borrower can qualify for.
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