Current national mortgage and refinance rates, December 29th, 2021: Rates still low

Mortgage rates moved in different directions this week, according to data compiled by Bankrate. Read on for a detailed breakdown of how different loan types moved.

Rates last updated on December 29, 2021.

The rates listed here are Bankrate’s overnight average rates and are based on the assumptions shown here. Actual rates displayed on-site may vary. This story has been reviewed by in-house editor Bill McGuire. All rate data accurate as of Wednesday, December 29th, 2021 at 7:30am.

>>Check out historical mortgage interest rate trends

You can save thousands of dollars over the life of your mortgage by getting multiple offers. “It is so important to shop around,” says Greg McBride, CFA, Bankrate chief financial analyst. “Not everyone offers the same price, and some lenders may have motivation to be very competitive on price.”

Mortgage rates for home purchase

30-year fixed-rate mortgage trends higher, +0.05%

The average rate for the benchmark 30-year fixed mortgage is 3.24 percent, an increase of 5 basis points over the last seven days. Last month on the 29th, the average rate on a 30-year fixed mortgage was lower, at 3.23 percent.

At the current average rate, you’ll pay principal and interest of $434.66 for every $100k you borrow. That’s an additional $6.56 per $100,000 compared to last week.

The 30-year mortgage is the most popular home loan, and it has a number of advantages. Among them:

  • Lower monthly payment. The 30-year mortgage offers lower, more affordable payments spread over time compared with shorter-term mortgages.
  • Stability. With a 30-year mortgage, you lock in a consistent principal and interest payment. Because of the predictability, you can plan your housing expenses for the long term. Remember: Your monthly housing payment can change if your homeowners insurance and property taxes go up or, less likely, down.
  • Buying power. With lower payments, you can qualify for a larger loan amount and a more expensive home.
  • Flexibility. Lower monthly payments can free up some of your monthly budget for other goals, like building an emergency fund, contributing to retirement or college tuition, or saving for home repairs and maintenance.
  • Strategic use of debt. Some argue that Americans focus too much on paying down their mortgages rather than adding to their retirement accounts. A 30-year fixed-rate mortgage with a lower monthly cost can allow you to save more for retirement.

15-year mortgage goes unchanged

The average 15-year fixed-mortgage rate is 2.50 percent, unchanged over the last week.

Monthly payments on a 15-year fixed mortgage at that rate will cost $390 per $100,000 borrowed. Yes, that payment is much bigger than it would be on a 30-year mortgage, 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 more rapidly.

5/1 ARM stays put

The average rate on a 5/1 adjustable rate mortgageis 2.74 percent, unchanged since the same time last week.

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

Monthly payments on a 5/1 ARM at 2.74 percent would cost about $402 for each $100,000 borrowed over the initial five years, but could ratchet higher by hundreds of dollars afterward, depending on the loan’s terms.

Jumbo mortgage rate moves up, +0.06%

is 3.24 percent, an increase of 6 basis points since the same time last week. A month ago, the average rate for jumbo mortgages was lower, at 3.22 percent.

At the current average rate, you’ll pay $434.66 per month in principal and interest for every $100,000 you borrow. That’s $6.56 higher compared with last week.

In summary: How interest rates have changed this week

  • 30-year fixed mortgage rate: 3.24%, up from 3.19% last week, +0.05
  • 15-year fixed mortgage rate: 2.50%, the same as last week
  • 5/1 ARM mortgage rate: 2.74%, the same as last week
  • Jumbo mortgage rate: 3.24%, up from 3.18% last week, +0.06

Mortgage refinance rates

Current 30 year mortgage refinance rate goes up, +0.06%

The average 30-year fixed-refinance rate is 3.22 percent, up 6 basis points from a week ago. A month ago, the average rate on a 30-year fixed refinance was lower, at 3.20 percent.

At the current average rate, you’ll pay $428.10 per month in principal and interest for every $100,000 you borrow.

Determining how much house you can afford

If you’re not sure how much of your income should go toward housing, follow the traditional 28/36 percent rule. Most financial advisers agree that people should spend no more than 28% of their gross income on housing (i.e., your mortgage payment or rent), and no more than 36% of their gross income on total debt, including mortgage payments, credit cards, student loans, medical bills and the like. Calculate how much house you can afford and determine your monthly payments.

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