Current mortgage rates seem low enough to warrant having to dig for them underground. HSH Associates reports that combined average mortgage rates for conforming and jumbo loans have fallen once more. Rates for a 30-year fixed rate mortgage (FRM) loan dropped from last week's average of 4.87 percent to 4.79 percent. Rates for a 15-year mortgage fell from 4.34 percent to 4.26 percent. For a 5/1 adjustable rate mortgage (ARM), the combined average rate is 3.77 percent, which is down 8 basis points from last week's combined average rate of 3.85 percent.
15-year mortgage loans offer low, low rates and can save you money
Although a 30-year fixed-rate mortgage has been the "workhorse" of American home financing for years, 15-year mortgage loans are typically available for lower rates than 30-year mortgage loans, making them more affordable than they used to be. Buying or refinancing your home with a 15-year mortgage loan gives you two main benefits:
- Faster growth of equity: If you can afford the higher monthly payment, you'll pay down the principal and build equity in your home faster.
- Lower cost of borrowing: You'll pay off your mortgage faster and pay less interest over a term of 15 years than for 30 years, potentially saving you thousands of dollars.
Save even more on a mortgage loan the DIY way
Financially disciplined homeowners can save even more mortgage interest, while paying off their loan and building home equity even faster, by making additional principal payments every month. If you want to pay off your mortgage by a specific date, use free online mortgage calculators for determining how much extra to pay each month. Paying additional principal every month is comparable to putting your money in the bank and earning interest at the same rate as the best mortgage rates.
Our live database of current mortgage rates can help you find the best mortgage rates in your area.