Most mortgage interest rates head back down

JEFF OSTROWSKI
BANKRATE.COM
Mortgage interest rates started heading back down this week.

The average mortgage rates were mostly down compared to a week ago. Rates for 30-year fixed, 15-year fixed and jumbo loans declined, while rates for adjustable rate mortgages rose.

The average 30-year fixed-mortgage rate is 3.18 percent, a decrease of 9 basis points over the last week. Last month on the 12th, the average rate on a 30-year fixed mortgage was higher at 3.23 percent.

At the current average rate, you’ll pay a combined $431.37 per month in principal and interest for every $100,000 you borrow. That represents a decline of $4.93 over what it would have been last week.

The average rate for the benchmark 15-year fixed mortgage is 2.43 percent, down 8 basis points from a week ago.

Monthly payments on a 15-year fixed mortgage at that rate will cost around $664 per $100k borrowed. The bigger payment may be a little more difficult to find room for in your monthly budget than a 30-year mortgage payment would, but it comes with some big advantages: You’ll come out several thousand dollars ahead over the life of the loan in total interest paid and build equity much faster.

The average rate on a 5/1 adjustable rate mortgage is 3.10 percent, climbing 3 basis points over the last week.

Adjustable-rate mortgages, or ARMs, are mortgage loans that come with a floating interest rate. To put it another way, the interest rate can change intermittently throughout the life of the loan, unlike fixed-rate mortgages. These types of loans are best for people who expect to refinance or sell before the first or second adjustment. Rates could be materially higher when the loan first adjusts, and thereafter.

Monthly payments on a 5/1 ARM at 3.10 percent would cost about $427 for each $100,000 borrowed over the initial five years, but could increase by hundreds of dollars afterward, depending on the loan’s terms.

Jumbo mortgage rates went down .11 percent to 3.18 percent, a decrease of 11 basis points since the same time last week. A month ago, the average rate for jumbo mortgages was higher, at 3.27 percent.

At today’s average jumbo rate, you’ll pay principal and interest of $431.37 for every $100k you borrow. That’s lower by $6.03 than it would have been last week.

The average 30-year fixed-refinance rate is 3.25 percent, down 11 basis points over the last seven days. A month ago, the average rate on a 30-year fixed refinance was higher, at 3.31 percent.

At the current average rate, you’ll pay $435.21 per month in principal and interest for every $100,000 you borrow. Compared with last week, that’s $6.06 lower.

Summary: How mortgage rates have shifted

-          30-year fixed mortgage rate: 3.18 percent, down from 3.27 percent last week, -0.09

-          15-year fixed mortgage rate: 2.43 percent, down from 2.51 percent last week, -0.08

-          5/1 ARM mortgage rate: 3.10 percent, up from 3.07 percent last week, +0.03

-          Jumbo mortgage rate: 3.18 percent, down from 3.29 percent last week, -0.11