After oscillating between 2.47 and 2.48 percent for a month, the average rate on a 15-year fixed mortgage fell this week to 2.44 percent in Bankrate’s latest survey. It’s the lowest interest for 15-year mortgages since February.
Since the start of the coronavirus pandemic, mortgage rates have remained consistently low, leading to a wave of refinancing and encouraging a rush of home purchases around the country.
For many buyers and refinancers, these low rates have made 15-year mortgages a great option.
Rates on 15-year loans are generally lower than those on 30-year mortgages, and with less time to compound, they almost always save borrowers significant money in interest. But that comes at a cost in the form of higher monthly payments. On a $300,000 loan, a 15-year mortgage holder could save around $100,000 in interest overall compared to a 30-year loan, but the monthly payments will be hundreds of dollars more.
It’s unlikely that this slew of low rates will last much longer. Experts predict 2021 will close the year with rates at higher levels. The immediate picture is less clear, however. In Bankrate’s weekly poll, respondents were mostly divided over whether rates would stay steady or rise.
“The Fed might not be ‘thinking about thinking about’ tapering asset purchases, but they are thinking about talking about it. That’ll be enough to spook investors a bit,” said Greg McBride, Bankrate’s chief financial analyst.