Second Chance: Mortgage Rates Come Back Down
Rates at just above 5 percent
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Don't miss another chance to lock in a good rate.
For those kicking themselves for not locking in a mortgage rate a few months ago when rates dipped below 5 percent, last week’s big drop in rates might be a lucky second chance. They are still not as low as they were, but at just above 5 percent they are extremely low by any standard.
The dip in rates encouraged a lot of consumers last week to pull the trigger on securing a loan or refinancing, according to the Mortgage Bankers Association, which releases a weekly report on mortgage application volume. Refinancing activity in particular was up, popping almost 18 percent week-over-week.
MBA noted that the average rate for a 30-year fixed-rate mortgage dropped from 5.34 percent the week before last to 5.05 last week. To understand how much of a difference that can make to your personal finances, take a look at the table below which compares the monthly payments at both rates for various mortgage amounts:
| Mortgage | Payment/month at 5.05% |
Payment/month at 5.34% |
Monthly difference |
|---|---|---|---|
| $200,000 | $1,080 | $1,116 | $36 |
| $300,000 | $1,620 | $1,673 | $53 |
| $400,000 | $2,160 | $2,231 | $71 |
| $500,000 | $2,699 | $2,789 | $90 |
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