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Mortgage Rates & Affordability

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
1970s 8.86% $1,589
1980s 12.70% $2,166
1990s 8.12% $1,484
2000s 6.29% $1,237
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.


Key Takeaways

  1. If you're in the market to buy a home, you’ll want to watch mortgage rates carefully

  2. Today historically low mortgage rates contribute to homebuying affordability and enhance your purchasing power


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Michelle - Sterling, VA

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