According to the newest Bankrate data, average mortgage rates continue to drop, making this a great time to lock in a rate if you are thinking of refinancing your property or if you are in the market for a new home. While mortgage rates fluctuate almost every day, they are incredibly low by historical standards.
In the past week, the average rate for the benchmark 30-year fixed mortgage decreased by 4 basis points to 3.52 percent. Just a month ago, that average was 3.79. These low averages translate into real savings for homeowners. At the current rate of 3.52, you would pay an average of $450.16 for every $100,000 borrowed, reflecting a $2.24 drop from the last week of April 2020.
The average rate for a 15-year fixed mortgage is even lower, currently sitting at 3.11 percent, reflecting a decrease of 2 basis points in the past week. While the payment for a 15-year mortgage is higher than the 30-year option, there are major advantages to choosing a shorter term, including saving thousands of dollars in interest over the lifetime of the loan and building equity much more quickly. On average, you would pay $696 per $100,000 borrowed with a 15-year fixed mortgage.
Another option that is best for those who expect to sell or refinance a property before the first or second adjustment is a 5/1 adjustable rate mortgage (ARM). The average interest rate for a 5/1 ARM mortgage fell by 8 basis points in the past week and now sits at 3.34 percent. In terms of monthly payment, the current 3.34 rate would cost about $440 for each $100,000 borrowed for the first five years of the loan. However, that monthly payment could climb by hundreds of dollars each month after those first five years, depending on the terms of the loan.