Mortgage charges for Oct. 13, 2021: Regardless of bounce, charges stay low
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The average interest rates on 15-year fixed-rate mortgages and 30-year fixed-rate mortgages (and many adjustable rate mortgages) have increased since last week. And although mortgage interest – and– stay fairly low, it becomes more and more likely that they will continue to rise this year and next.
Conclusion: If you want to secure a fixed price, now is the best time to do so. Of course, your specific financial situation will dictate your specific interest rate. So, before buying a home, consider your personal goals and circumstances and find a lender who best suits your needs.
30-year fixed-rate mortgages
The average interest rate on a standard 30-year fixed-rate mortgage is 3.19%, an increase of 8 basis points from the seven-day period. (One basis point is 0.01%.) The most common repayment term is a 30-year fixed-rate mortgage. A 30-year fixed-rate mortgage often has a higher interest rate than a 15-year fixed-rate mortgage – but it also has a lower monthly payment. You won’t be able to pay off your home that quickly, and you will pay more interest over time, but a 30-year fixed-rate mortgage is a good option if you want to minimize your monthly payments.
15-year fixed-rate mortgages
The average interest rate for a 15-year fixed-rate mortgage is 2.43%, which is an increase of 5 basis points over the previous week. Compared to a 30-year fixed-rate mortgage, a 15-year fixed-rate mortgage has a higher monthly payment for the same mortgage lending value and interest rate. But a 15 year loan is probably a better deal if you can afford the monthly payments. This usually includes the option of getting a lower interest rate, paying off your mortgage earlier, and paying less total interest in the long run.
5/1 adjustable rate mortgages
A 5/1 ARM has an average rate of 3.21%, an increase of 10 basis points from the same point in time last week. A variable rate mortgage usually gives you a lower interest rate for the first five years than a 30-year fixed-rate mortgage. However, changes in the market can cause your interest rate to rise after that time, as detailed in the terms of your loan. If you are planning to sell or refinance your home before the interest rate change, an adjustable rate mortgage may make sense for you. If this is not the case, however, if there is a shift in market rates, you could be aiming for a significantly higher rate.
Mortgage rate trends
We use information collected by Bankrate, owned by the same parent company as CNET, to keep track of daily mortgage rate trends. This table summarizes the average interest rates offered by US lenders:
Average mortgage interest
|Fixed for 15 years||2.43%||2.38%||+0.05|
|30 year jumbo mortgage rate||2.79%||2.79%||opener|
|30 year mortgage refinancing rate||3.17%||3.08%||+0.09|
Prices from October 13th, 2021.
How to Find Personalized Mortgage Rates
You can get a personalized mortgage rate by connecting with your local mortgage broker or using an online calculator. When looking for home mortgage rates, consider your goals and current finances. Factors that will affect your mortgage rate include: your credit score, down payment, loan-to-value ratio, and your debt-to-income ratio. In general, you want good credit, a larger down payment, a lower DTI, and a lower LTV in order to get a lower interest rate. Aside from the mortgage rate, other things like closing costs, fees, rebate points, and taxes can also be included in the cost of your home. Make sure you check out multiple lenders – such as credit unions and online lenders, and local and national banks – to get a loan that suits you.
What is a good repayment term?
An important consideration when choosing a mortgage is the repayment term or payment schedule. The most common mortgage terms on offer are 15 year and 30 year, although you can also find 10, 20 and 40 year mortgages. Another important difference is between fixed rate and adjustable rate mortgages. With fixed-rate mortgages, the interest rates are fixed for the term of the loan. In contrast to a fixed-rate mortgage, the interest rates on an adjustable-rate mortgage are only stable for a certain period of time (usually five, seven or 10 years). After that, the interest rate fluctuates annually based on the market rate.
When deciding between a fixed rate mortgage or an adjustable rate mortgage, you should consider how long you plan to stay in your home. For those looking to stay in a new home for an extended period of time, fixed-rate mortgages may be a better option. While adjustable rate mortgages can have lower interest rates upfront, fixed rate mortgages are more stable over the long term. However, if you don’t plan on keeping your new home for more than three to ten years, a variable rate mortgage might be a better deal for you. The best repayment term depends entirely on your specific situation and goals. Therefore, when choosing a mortgage, consider what is important to you.
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