As of October 9th, 2021, average 30-year fixed mortgage rates have reached an all-time low of 2.99%, while the average 15-year rate is at an impressive 2.63%. Meanwhile, conventional adjustable-rate mortgages are also reaching unprecedentedly low levels, with the average 5/1 ARM rate at just 2.84%. With these rates, it's a great time to consider a home loan refinance or the purchase of a new home.
For those considering a refinance of their existing mortgage, the current rates provide a chance to lower their monthly payments and save money in interest charges over the life of the loan. Additionally, for homeowners with higher rates, they can potentially benefit from a shorter loan term, resulting in a faster payoff date and even more savings over time. However, when refinancing an existing loan, borrowers should keep in mind that there may be additional costs involved, such as closing costs and other fees associated with the new loan.
For potential homebuyers, the current mortgage rates offer a great opportunity to purchase a home at a great price. Buyers should consider both fixed-rate mortgages and adjustable-rate mortgages when shopping for a loan. With an adjustable rate mortgage, the borrower can capitalize on the low initial rate, while still having the security of a fixed rate later on if rates eventually rise again.
Overall, the current mortgage and refinance rates provide a fantastic incentive for people to either take advantage of a refinance of their existing loan or purchase a new home. With a record low average 30-year mortgage rate, it is likely that thousands of Americans will take advantage of the current market conditions and save money over the life of their loan. For both buyers and refinancers alike, it is important to examine the individual terms of the loan, as well as any associated fees, before making a decision. Doing this ensures that borrowers find the best option for their needs and financial situation.
This article was contributed on Jul 30, 2023
