Mortgage rates hit a new all-time high

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Just when you thought mortgage rates couldn’t come down…here we are.

The lower your mortgage rate, the less your house will cost you. And if you’re in the market for a mortgage these days, you’re in luck because rates seem to only go down on the downside. Indeed, on August 6, mortgage rates reached a historically low level: 2.88% for a 30-year fixed-rate mortgage and 2.44% for a 15-year fixed-rate loan. And that’s reason enough to consider locking in a mortgage today or refinancing your existing mortgage.

What could your housing payments look like at today’s rates?

The amount you’ll spend each month on a mortgage will depend on your loan amount, interest rate and other factors, including:

  • Whether your mortgage payment includes your property taxes and home insurance (in some cases you pay them yourself, but in others you pay extra to your mortgage lender and your lender makes these payments on your behalf)
  • Whether you are subject to private mortgage insurancewhich normally comes into play when you don’t pay at least 20% of the purchase of your house

But let’s say you’re looking to take out a $200,000 home loan and your monthly payments only cover principal and interest. In this case, here is what you would be responsible for each month:

  • $1,389 for a 30-year loan at 2.88%
  • $1,886 for a 15-year loan at 2.44%

With a 30-year mortgage, you’ll pay less each month than with a 15-year loan. But with a 15-year loan, you’ll be debt-free sooner, and you’ll also pay significantly less interest over the life of your loan. As such, it pays to see what your budget allows, because if you can swing a 15-year mortgage, you’ll see significant interest savings.

What about refinancing?

If you already have a mortgage, but your current interest rate is at least one percentage point higher than the current rate, then it’s worth looking into. refinancing. Keep in mind, however, that just as you paid closing costs on your original mortgage, closing costs will also apply when you refinance, so you just need to make sure you plan to stay in your home long enough to come out on top. For example, if refinancing costs you $4,000 upfront but saves you $200 per month, it will take you 20 months to break even, so it only pays to refinance if you think you’ll stay there longer than that.

Will you qualify for today’s historic low mortgage rates?

Just because the average 30-year mortgage rate fell to 2.88% and the average 15-year mortgage fell to 2.44% doesn’t mean you go benefit from these rates. Typically, the highest mortgage rates are reserved for applicants who can meet these criteria:

But it might still be beneficial to apply for a mortgage if your credit is good but not great. Indeed, even if you may not be eligible for the rates above, you can still benefit from a lower rate than you would normally have.

It also makes sense to shop with different mortgage lenders, whether you’re looking to lock in an original mortgage or refinance an existing home loan. One lender may give you a lower rate than another depending on your credit score and other factors, so rounding up a bunch of offers is a good way to capitalize on the great deals available to borrowers today. today.

The Best Mortgage Lender in Ascent in 2022

Mortgage rates are rising – and fast. But they are still relatively low by historical standards. So if you want to take advantage of rates before they get too high, you’ll want to find a lender who can help you get the best rate possible.

This is where Best Mortgage Between.

You can get pre-approved in as little as 3 minutes, without a credit check, and lock in your rate at any time. Another plus? They do not charge origination or lender fees (which can reach 2% of the loan amount for some lenders).

Read our free review