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For anyone in the market to buy or refinance a home, now is a good time to secure a low rate. Mortgage rates are unchanged today, keeping rates at historically low levels.
The average rate on a 30-year fixed mortgage is 3.16%, according to Bankrate.com. On a 15-year fixed mortgage, the average rate is 2.42%. The average rate for a 30-year jumbo mortgage is 3.11% and the average rate for a 5/1 ARM is 2.79%.
Related: Compare current mortgage rates
30 year fixed rate mortgages
The average rate remained stable on a 30-year fixed mortgage, remaining at 3.16%. The 52 week low is 2.83%.
The 30-year fixed mortgage APR is 3.32%. At the same date last week, it was 3.38%. Here’s why the APR is important.
At the current interest rate of 3.16%, homebuyers with a 30-year, $ 100,000 fixed-rate mortgage will pay $ 430 per month in principal and interest (taxes and fees not included), calculator says Forbes Mortgage Advisor. The total interest paid over the term of the loan will be approximately $ 54,902.
15 year fixed rate mortgages
On a 15-year fixed rate, the APR is 2.68%. Last week it was 2.75%.
At the current interest rate of 2.42%, a 15-year fixed rate mortgage would cost about $ 663 per month in principal and interest per $ 100,000. You would pay approximately $ 19,345 in total interest over the life of the loan.
The average interest rate on the 30-year fixed rate jumbo mortgage is 3.11%. Last week, the average rate was 3.21%. The 30-year fixed rate on a jumbo mortgage is currently higher than the 52-week low of 2.85%.
Borrowers with a 30-year fixed rate jumbo mortgage with a current interest rate of 3.11% will pay $ 428 per month in principal and interest per $ 100,000. This means that on a $ 750,000 loan, the monthly principal and interest payment would be approximately $ 3,207, and you would pay approximately $ 404,411 in total interest over the life of the loan.
On a 5/1 ARM, the average rate fell to 2.79% from 2.80% yesterday. The average rate was 2.79% last week. Today’s rate is currently below the 52-week high of 3.43%.
Borrowers with an ARM 5/1 of $ 100,000 with a current interest rate of 2.79% will pay $ 410 per month in principal and interest.
Calculate your mortgage payment
If you can’t or don’t want to pay cash, mortgage lenders and mortgages will be part of your home buying process. It’s important to figure out what you’re likely to pay each month to see if it’s within your budget.
You can use a mortgage calculator to estimate your monthly mortgage payment based on factors such as your interest rate, purchase price, and down payment.
Collect these data points to calculate your monthly mortgage payment:
- The price of the house
- The amount of your deposit
- The interest rate
- The term of the loan
- All taxes, insurance and HOA fees
What you can afford depends on a number of factors including your income, debt, debt-to-income ratio, down payment, and credit rating.
You should also factor in closing costs, property taxes, insurance costs, and routine maintenance expenses.
The type of loan you choose can also affect the amount of home you can afford. When shopping for a loan, consider whether a conventional mortgage, FHA loan, VA loan, or USDA loan is best suited to your particular situation.
Explain the annual percentage rate
The APR, or annual percentage rate, is a calculation that includes both the interest rate on a loan and the carrying charges on a loan, expressed as an annual cost over the life of the loan. In other words, it is the total cost of credit. APR takes into account interest, fees and time.
The APR is important because it can help you understand the total cost of your mortgage if you decide to keep it for the full term.