The average rate on a 15-year fixed mortgage fell six basis points this week, standing at 2.56% in Bankrate’s weekly survey of lenders. These lower rates give homebuyers some breathing space after rising last week, but the uptrend still seems to be in place. Interest on most mortgage products has gone up two notches and one notch lower for much of this year, and 15-year rates have been hovering around 2.6% for about a month.
For much of 2020 and the first few weeks of 2021, mortgage rates trough record as economic uncertainty reigned and central banks reduced borrowing costs. However, interest slowly rose through 2021, and while rates are still low by historical standards, their upward trajectory limits options for potential homeowners and refinancers.
Throughout the past year, 15-year mortgages have seen a resurgence in popularity because their extremely low interest rates offset the higher monthly costs, making them more affordable than ever to more people. borrowers. As rates continue to climb, this trend is likely to reverse, sending more people back to the still dominant 30-year loans.
With fares still relatively low, however, it’s well worth it. considering a 15-year mortgage if your budget allows. As long as you can afford the higher monthly payments, you’ll save significantly on interest over the life of the loan, thanks to both a shorter repayment period and lower interest rates.
Even more good news for borrowers, with mortgage rates gradually rising, many lenders are protecting applicants by keeping their offers stable.
“Any slight rise in rates will not show up in mortgage prices as lenders will reduce their profit margins to keep rates constant,” said Jeff Lazerson, president of MortgageGrader in Bankrate’s weekly survey mortgage experts.
