If you've been thinking of refinancing your mortgage, now may be the time to do it, as the predicted increase in mortgage rates seems to have begun. Average rates for 15-year and 30-year fixed-rate home loans both rose this week, making monthly payments increasingly expensive.
The rate on 30-year fixed-rate mortgages rose to 3.49 percent, a climb of four basis points from last week. The rate is 0.09 percent higher compared to a month ago and equates to an extra $2.23 per $100,000 from last week, meaning that total interest and principal payments on each $100,000 are now $448.49.
Rates for 15-year fixed-rate home loans have grown even more, rising seven basis points from last week, to reach 2.77 percent, making the average monthly repayment $680 per $100,000 now. Although 15-year mortgages have larger monthly repayments than 30-year loans, the total interest over the lifetime of the mortgage is less. This makes it a cost-saving option for those who have the extra cash each month.
Fixed-rate mortgages are not the only loans to see movement – 5-year adjustable-rate mortgages (ARMs) have also become more expensive. Over the past week, ARMs have increased by 2 basis points, meaning the current rate is now 3.03 percent. For now, monthly costs are $423 per $100,000 for the first five years, but this could rise by hundreds of dollars after the five-year period.
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