Mortgage Rates Hit New Low
Both 15-year and 30-year mortgage rates have hit a new low. This is in part caused by the large sell-off of stocks last week, and people are parking their money in Treasurys. Secondly, in the aftermath of Superstorm Sandy, there were fewer people filing for loans.
From CNN Money:
Mortgage rates dropped again this week, sending both 15-year and 30-year fixed-rate loans to record lows.
According to mortgage giant Freddie Mac, the average rate on the 30-year fell to 3.34%, 0.06 percentage point lower than last week. The 15 year fell 0.04 percentage point to 2.65%
“[The storm] had a significant impact on application volumes on the East Coast,” said Mike Fratantoni, MBA’s Vice President of Research and Economics. “Applications fell more than 60% compared to the prior week in New Jersey, almost 50% in New York and nearly 40% in Connecticut.”
Record low rates have made mortgage borrowing cheaper than even just a year ago, when rates were thought to be extremely favorable. At the time, 30-year loans had rates of about 4%.
A homebuyer today would save about $27 a month for every $100,000 borrowed, compared with last November. That’s a savings of $486 a year on a typical mortgage balance of $150,000.
The Wall Street Journal weighed in as well:
For the week ended Thursday, the 30-year fixed-rate mortgage averaged 3.4%, compared with 3.39% the previous week and 3.99% a year earlier.. A year ago the 30-year fixed rate hit 3.99%, falling below 4% for the first time since Freddie began providing its weekly update in 1971, the company said.
Rates on 15-year fixed-rate mortgages averaged 2.69%, versus 2.7% a week earlier and 3.3% a year earlier. Five-year Treasury-indexed hybrid adjustable-rate mortgages, or ARMs, averaged 2.73%, compared with 2.74% the previous week and the 2.98% a year earlier. One-year Treasury-indexed ARM rates averaged 2.59%, compared with 2.58% the prior week and 2.95% a year earlier.
Changing from a 30-year to a 15-year will save you a significant amount in the long term, and now may be the time to refinance. Contact your local mortgage broker and set up an appointment to talk about your specific situation.