15-year mortgage rate rises, but still well below 3 percent

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The average rate on a 15-year fixed mortgage rose again this week, settling at 2.64 percent, its highest level since mid-August. It’s the third week in a row that the average 15-year rate has gone up, but it’s still a good deal for those who can afford the monthly payments.

Since the start of the coronavirus pandemic, mortgage rates have tumbled, which has driven a wave of refinancing and encouraged a rush of home purchases around the country.

The ongoing low rate trend over the last year has made 15-year loans a good option for more borrowers than ever. Those with a 15-year mortgage stand to save substantially on interest, because these shorter-term loans usually have lower rates to begin with, and less time to compound than the more common 30-year mortgage products. However, because the repayment period is compressed, a shorter loan can squeeze your monthly budget with higher payments.

Even so, with interest rates this low, many borrowers have found 15-year loans to be affordable recently.

Experts predict rates will continue on this upward trajectory for a while to come as the coronavirus recovery gathers steam.

For homeowners and buyers, that means time is running out to secure or refinance a mortgage with historically low interest.

“Even with the recent rise in rates, mortgage rates are still lower than anything seen prior to last summer,” said Greg McBride, Bankrate’s chief financial analyst. “Homeowners can take advantage by refinancing a mortgage, reducing the monthly payment, and saving tens of thousands of dollars over the life of the loan.”

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