There have been concerns for many homebuyers over the past few weeks, as mortgage rates have steadily risen. The presidential election failed to prevent further gains. Now, though, while some rates continue to increase, one notable figure has declined, offering consumers the chance to take advantage of cheaper home buying offers.
For many borrowers, particularly those looking at buying their first property, 30-year fixed mortgages are the go-to option. Over the past month, interest rates have grown significantly, from a 3.51 percent average last month to over four percent now. During the last seven days, however, this has lost three basis points, dropping from 4.01 to 3.99 percent.
The drop in interest rates on 30-year fixed-rate mortgages means that every $100,000 borrowed will cost you a payment of $476.84 in principal and interest per month. This is $1.73 lower than it was last week.
Other rates have continued to grow. For example, average mortgage costs for a 15-year fixed-rate home loan have risen by two basis points to 3.18 percent. It means that for every $100,000 borrowed, monthly payments for principal and interest are $699. Although this puts more pressure on household income each month than a 30-year fixed mortgage would, it could be worth taking advantage of, as it can shave thousands of dollars off the cost of your mortgage in the long term.
Finally, the average 5-1 hybrid adjustable-rate mortgage (ARM) rate has risen, to 3.4 percent – an increase of two basis points. Current figures mean that monthly payments for interest and principal are around $443 per $100,000 borrowed. This could rise significantly when the mortgage adjusts, depending on the terms of the loan.
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