If you're in the market to buy a home, today's average mortgage rates are something to celebrate compared to almost any year since 1971.
Mortgage rates play a significant role in how much home you can afford, and it's important to watch them carefully as a homebuyer. 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% (1981) to a low of 3.31% (2012). While it's not likely that the average 30-year fixed mortgage rate will return to its all-time record low, today's average rates are still low compared to almost any year since 1971 – all to your advantage.
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.
|DATE||AVERAGE 30-YEAR FIXED MORTGAGE RATE||APPROXIMATE PAYMENT ON A $200,000 MORTGAGE|
|April 7, 2016||3.59%||$908|
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/
Buying a home is a big investment – perhaps the biggest one you'll make in your life. So, it's important to be sure you're ready to make that purchase. If you are ready, today's rates are not to be missed.
For more information and tools on buying a home and homeownership, visit Ready to Buy.
Follow this series just in time for the spring homebuying season.
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