Mortgage Interest Rates Drop and Look to Stay Low for a While
Low Mortgage Rates Continue
The standard of 30-year fixed mortgage rate is at a new low record for the third straight week with a reduction to 4.35%, according to the weekly survey of Bankrate.com. In the previous week, this was at 4.37%. The average 30-year fixed mortgage has an estimate of 0.38 mark down and origination points.
A complete listing of mortgage rates in different areas can be found at http://www.bankrate.com/funnel/mortgages/
The mean rate for 15-year fixed mortgage stayed at 3.48% while that of the 30-year fixed mortgage is at 4.86%. The trend of the adjustable mortgage rates is different. For a 5-year adjustable mortgage, the rate is moving higher to 3.1%. On the contrary, the 7-year adjustable mortgage rate is getting lower to 3.21%.
Bankrate.com conducts their weekly survey every Wednesday. It uses the data given by top 10 banks. The results of its survey are also based from the record provided by top 10 markets’ thrifts.
A bad employment report pulled down the mortgage rates for the sixth straight week. Fears of a threatening recession and continuous economic depression have increased the attractiveness of long-term Treasury securities, with very low projected returns. Fixed mortgage rates and mortgage-backed bonds’ profits are highly correlated with the returns on 10-year Treasury notes. Although there is a possibility that the Federal Reserve will find ways to decrease the long term interest rates even further as a way to continue lowering mortgage rates, growing the number of qualified refinancers will make the low rates of mortgages impact the economy at a bigger scale.
The last period when mortgage rates were above 6% was in November of 2008. Specifically, the average rate for a 30-year fixed mortgage during that time was at 6.33%. So a loan of $200,000 back then required a monthly payment of $1,241.86. With the present rate of 4.35%, the same amount of loan will only charge $995.62 for monthly payment. This is a $246 difference every month for anyone who is refinancing at the current rate.