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2011-06-02 15:58:27
Pinch me: Rates fall for 7th straight week

I still can't believe it but interest rates have fallen, again, for the 7th straight week, to year-to-date lows!!


Here is the graph from MortgageMatch.com showing national interest rate trends:

Interest Rate Trends June 2011


Right now, on 30 year fixed rate mortgages, both FHA and RUral Development loans are at 4.25% and could even be slightly under that; and conventional loans are around 4.5%.


As I have explained before, the determination of a 'great deal' on a home purchase, for those taking out a mortgage, is equally determined by both purchase price AND interest rate. 


For every percentage point (1%) on a mortgage, monthly payments increase $83/month for every hundred thousand dollars that you borrow. So the difference between a 4.25% and a 5.25% interest rate on a $200,000 loan is an additional $167/month, or $2000/year, JUST IN INTEREST!!


The additional $167/month is the same as purchasing a home that is about $25,000 more expensive at current interest rates. In other words, mortgage payments would be about the same for a $225,000 mortgage at 4.25% interest as a $200,000 mortgage at 5.25% interest. 



Here is a graph which shows how much (approximately) interest rates affect monthly mortgage payments:

 

Loan Amount

Payment at 4.25% interest (2010-2011)

Payment at 5% interest (2009)

Payment at 6.25% interest (2002-2008)

Payment at 8% interest (92-02)

$100,000

$605

$650

$730

$850

$120,000

$730

$780

$875

$1,015

$150,000

$900

$975

$1,090

$1,265

$200,000

$1,200

$1,300

$1,450

$1,680

$300,000

$1800

$1950

$2,180

$2,530



If you would like buy, you can afford to buy and you find a home that you love for the right price, there is no better time than now with these interest rates. Let me know what I can do to help!



Here is the artcile from MortgageMatch.com explaining current national interest rate trends:


According to the newest Freddie Mac Primary Mortgage Market Survey, fixed-rate mortgages edged down for the seventh straight week—a new record low for the year—on troubling economic data.

“Fixed mortgage rates followed U.S. Treasury yields lower this week amid financial market concerns that the current lull in the economy is continuing.” Freddie Chief Economist Frank Nothaft said.

The average rate for 30-year fixed-rate mortgages (FRMs) dropped to 4.55 percent from the previous week, when it was 4.60 percent.

This week 15-year fixed rates averaged 3.74 percent, down from last week when it averaged 3.78 percent. A year ago at this time, the 15-year FRM averaged 4.20 percent.

The rate for 5-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 3.41 percent this week, the same as last week when it averaged 3.41 percent. A year ago, the 5-year ARM averaged 3.94 percent.

Additionally, 1-year Treasury-indexed ARMs averaged 3.15 percent this week, up from last week when it averaged 3.11 percent. At this time last year, the 1-year ARM averaged 4.00 percent.

To obtain the rates, t30-year mortgages required the payment of an average 0.7 points in fees, while 15-year fixed-rate, 5-year and 1-year ARMs required 0.6 point.


 
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