Mortgage Rates Drop Once Again

Mortgage Rates Drop Once Again


It is a great time to buy a new home!

If you believe you have heard that line before, that isn’t surprising. On Thursday, reported that the rate on the average conforming 30-year home loan dropped once again, to 4.81 percent. For 15-year home loans the average rate is now 4.26 percent, the lowest it has ever been.

mortgage moneyOver the past several months mortgage rates have flirted or set new low records, giving home loan shoppers a wonderful chance to save themselves some money.

Tough Market

Though the financing news is good, the overall economic outlook remains grim. Foreclosures have eased in most markets, but home values remain much lower than what they were as recently as 2007, just ahead of the market burst. Unemployment remains high, just below the 10 percent figure.

Bankrate expects that mortgage rates will continue to stay in the historic low range for some time. Lingering doubt about the sustainability of the U.S. economic recovery will keep mortgage rates near their present levels.

Home Refinancing

Should you refinance now? That is a good question, likely based on a number of factors including your current loan rate, years left on your mortgage, your personal financial picture including employment and credit rating and how long you plan to stay in your home.

According to Bankrate, the last time mortgage rates were above six percent was in Nov. 2008.  The average rate then was 6.33 percent, which would have meant a $200,000 loan had a monthly payment of $1,241.86. With the average rate now 4.81 percent, the monthly payment for the same loan would be at $1,050.54, a savings of $191 per month for a homeowner refinancing now.

Big Savings

Those monthly savings would equal annual savings of $2292, perhaps not enough to justify refinancing especially if you have to pay thousands in closing costs. But, if you plan on staying in your home for the next five years, then you would save $11,460.

You can also negotiate lower closing costs or see if your current lender will drop your rate. If so, then your closing costs will drop too.

Adv. — Are you looking for a new loan? Visit to find a lender offering you a great rate and lower closing costs. Historic low financing rates won’t be here forever; if you are in a position to refinance now consider how much you will save.


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Categories: Home Financing

About Author

Matthew C. Keegan

Matt Keegan is a freelance writer and editor as well as publisher of "Matt's Musings", his personal blog. Matt covers campus, consumer, business and financial topics on various websites and blogs, and has been published in the "Houston Chronicle", "Sam's Club Magazine" and "Wisconsin Golfer".