What You'll Learn
- Mortgage rates play a significant role in how much home you can afford
- Mortgage rates are still historically low – an advantage to all homebuyers
- In November 2012, mortgage rates hit a record low of 3.31%
Mortgage rates play a significant role in how much home you can afford, and it’s important to watch them carefully if you’re in the market to buy a home. The lower the rate, the better – even a small rise in rates can make a home that was once affordable, unaffordable.
Mortgage rates change frequently and over the last 45 years they have ranged from a high of 18.63% to a low of 3.31%. While it’s not likely that the average 30-year fixed mortgage rate will return to the all-time record low of 3.13%, average rates are still low compared to almost any year since 1971 – all to the advantage of today’s homebuyers.
Did You Know the 30-year fixed mortgage rate hit a record high of 18.63% in 1981?
To put the financial importance of mortgage rates in perspective, this chart outlines a $200,000 loan financed at various rates over the past 45 years.
|Decade||Average 30-Year Fixed Mortgage Rate||Approximate Payment on a $200,000 Mortgage|
|2015 Average YTD||3.69%||$921|
Source: Freddie Mac Primary Mortgage Market Survey® (PMMS®). Tracking through the PMMS began in March 1971. Mortgage payments are principal and interest only, based on a $200,000 fully amortizing mortgage. All terms are assumed to be 30 years. FreddieMac.com/pmms/
If you're in the market to buy a home, you’ll want to watch mortgage rates carefully
Today historically low mortgage rates contribute to homebuying affordability and enhance your purchasing power