Thursday, July 22, 2004

Mortgage Rates Drop To Three Month Low

The average 30-year fixed rate mortgage fell to a three-month low of 6.06 percent from 6.11 percent last week, according to a weekly national survey of large lenders. The 30-year fixed rate mortgages in this week's survey had an average of 0.32 discount and origination points.

The 15-year fixed rate mortgage popular for refinancing dipped from 5.5 percent to 5.47 percent.

Mortgage rates have decreased in response to several economic factors including slower than expected job growth, sluggish retail sales, and a drop in housing starts. This all increases anticipation for measured series of interest rate hikesby the Federal Reserve's rate-setting committee.

How To Save When Rates Drop

Consider the fact that just two months ago the average rate was at an eight-month high of about 6.40 percent, the monthly payment for a $165,000 loan was about $1,030. With the average 30-year fixed mortgage rate now at about 6.0 percent, the monthly payment for the same size loan is less than 999 with a savings of $30 per month and about $12,000 over the loan term.

Those seeking to refinance of purchase a home would do well to consider taking advantage of current rates.