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Interest Rates are Below 5% for a 30 Year Fixed Rate Mortgage

Interest Rates are Below 5% for a 30 Year Fixed Rate Mortgage

My clients just locked in a 4.85% interest rate loan on a new home purchase in San Marino.  Not only is this home loan under 5%, but it has NO points.  A point is what a bank charges to reduce your interest rate.  1 point is 1% of the home mortgage amount.  1/2 a point is 1/2 a percent and so on.

According to Freddie Mac, 30-year-fixed-rate mortgage average fell further to 4.87 percent with an average 0.7 point for the week ending Oct. 8 from 4.94 percent last week. “Such low rates are spurring mortgage demand,” said Frank Nothaft, Freddie Mac vice president and chief economist, in a statement.

“Interest rates for 30-year fixed-rate loans were the lowest since mid-May; 15-year FRMs were at a record low since data were first collected in 1991 and 5-year ARMs also hit an all-time record starting in 2005. Compared to a year ago, consumers could shave almost $134 off their monthly mortgage payments on a 30-year fixed-rate loan for $200,000 by refinancing.

In addition to spurring mortgage demand, applications were up to a 19-week high over the week ending in Oct. 2, according to the Mortgage Bankers Association – applications to purchase a home were at the strongest pace since the beginning of 2009.

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Posted on October 11th, 2009
Posted by: Irina Netchaev

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