Mortgage Rates Drop below 5 Percent Again

The average mortgage rates have been on a rollercoaster lately, but they have remained relatively low compared to years past. We may never see the historically low rates again that we saw just a few months ago, but the rates are still holding around 5 percent.

This week, the average mortgage interest rates for a 30-year fixed rate loan stood at about 4.8 percent. That’s a drop from the previous week’s average which was 4.91 percent. Last year, the average interest rate for a 30-year fixed rate mortgage was 5.07 percent so the latest rates are about a quarter of a percentage point lower today than they were a year ago.

For a 15-year fixed rate mortgage loan, the numbers are even better. This week’s average stood at about 4.02 percent for those who qualify. That’s a 0.11 percent drop from last week’s figures which stood at 4.13 percent. Last year at this time, a 15-year fixed rate mortgage was about 4.39 percent. That’s a 0.37 percent drop which is fairly significant in the mortgage industry.

If you prefer an adjustable rate mortgage and you qualify for the best rates, you can get a five-year hybrid ARM today at a 3.61 percent rate. That’s a 0.17 percent drop from last week’s numbers and an even bigger drop from last year’s 4.03 percent average. One-year ARMs are going for even less with this week’s average standing at about 3.16 percent. That’s a 0.09 drop from last week’s 3.25 percent rate and more than a whole percentage point from last year’s 4.22 percent rate.

Frank Nothaft, the chief economist at Freddie Mac, said the rates are as low as they are because of low inflation. Mortgage rates have been below 6 percent since November of 2008 when a 30-year fixed rate mortgage would cost the buyer about 6.33 percent. In terms of monthly payments, the difference between paying on a $200,000 mortgage in November of 2008 and today would be about $173 each month. So if you qualify for these rates now and you didn’t when you first bought your home, this might be the best time for you to refinance. You can put hundreds of dollars back in your pocket each month or pay off your mortgage quicker than you thought!

Find the best mortgage rates where you live.