30-year fixed rate mortgages
The average mortgage interest rate for a standard 30-year fixed mortgage is 6.96%, a decrease of 0.15 percentage points from last week’s 7.11%.
Thirty-year fixed mortgages are the most commonly sought out loan term. A 30-year fixed rate mortgage has a lower monthly payment than a 15-year one, but usually has a higher interest rate.
15-year fixed rate mortgages
The average mortgage interest rate for a standard 15-year fixed mortgage is 6.27%, a decrease of 0.03 percentage points from last week’s 6.30%.
Fifteen-year fixed rate mortgages come with a higher monthly payment compared to its 30-year counterpart. However, usually interest rates are lower and you will pay less total interest because you are paying off your loan at a faster rate.
5/1 adjustable rate mortgages
The average rate on a 5/1 adjustable-rate mortgage (ARM) is 5.80%, a decrease of 0.07 percentage points from last week’s 5.87%. With an ARM, you will most often get a lower interest rate than a fixed mortgage for say, the first five years.
When picking a mortgage, it is important to pick out a loan term or payment schedule. Usually you will be offered a 15 or 30-year loan term, but it is not uncommon to see 10, 20, or 40-year mortgages, according to CNET.
Mortgages can be fixed-rate or adjustable-rate. Interest rates in fixed-rate mortgages are set in stone for the duration of the loan.
Adjustable-rate mortgages only have interest rates set for a certain period of time before the rate adjusts annually based on the market.
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