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Current Mortgage Interest Rates: 5, 15 And 30 Year
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Published: October 25, 2006
Mortgages are used to help prospective homeowners secure real estate payments or refinance their homes.
A mortgage is a written pledge–a contractual agreement–between a lender and a borrower. Since there are a number of factors contributing to current mortgage rates, borrowers should be sure to thoroughly research their options before agreeing to a mortgage payment plan.
What Determines Current Mortgage Rates?
Economic supply and demand determines current mortgage rates. The best mortgage rates usually occur when the economy slows down. During economic deceleration, the Federal Reserve cuts home mortgage rates in an effort to cultivate the economy. Once the economy speeds back up, however, the Federal Reserve raises interest rates to control economic growth and inflation.
Indicators Predicting Current Mortgage Rates
The Consumer Price Index indicates inflation. Inflation is directly proportional to current mortgage rates. The higher the inflation, the higher the mortgage rate, and vice versa.
The Employment Cost Index measures the way in which wages, salaries and benefits alter over time. Rising labor costs force businesses to increase prices. Increased prices push current mortgage rates higher.
The Gross Domestic Product measures the nation's supply and demand by critiquing its total economic output.
What are the Current Mortgage Rates?
HSH Associates, the world's leading publisher for mortgage and consumer information, publishes a weekly sample of interest rates derived from surveys of more than 2,000 lenders. The following are some of their findings for the week of Oct. 23, 2006.
15-Year Fixed Rate Mortgage: Down payments range from 5 to 20 percent, with a common interest rate of 6 percent.
30-Year Fixed Rate Mortgage: Down payments lean closer to 5 percent, although a few lenders go as high as 20 percent. The average interest rate is about 6.12 percent.
1-Year Adjustable Rate Mortgage: Most lenders have their down payments set around 10 percent. Interest rates range from 5 to nearly 8 percent.
5/1-Year Adjustable Rate Mortgage: Lenders currently tend to stick closer to 20 percent for their down payments with this type of mortgage. Interest rates, however, vary near the 6-percent mark.
Though fixed and adjustable are the two main types of mortgage rates, they include several subcategories. Assumed mortgage rates, for example, fluctuate along with current market trends. Balloon mortgages include interest-only monthly payments, followed by a balloon sum after a fixed period of time. Seasoned mortgages have short payment periods and work best for those paying several mortgages in bulk.
To figure out which company has current mortgage rates best-suited to a particular need, contact several local lending agencies. Remember to be patient and shop around for the best rates. Web sites like Bankrate.com can help locate nearby creditors.
Wikipedia. 2006. 25 Oct. 2006. < http://en.wikipedia.org/wiki/Mortgage>
HRH Associates Financial Publishers. 2006. 25 Oct. 2006.
Bankrate. 2006. 25 Oct. 2006. < http://www.bankrate.com/brm/rate/mtg_home.asp>
CRHOME. 2006. 25 Oct. 2006. < http://www.crhome.com/mortgage-rates.htm>
A mortgage is a written pledge–a contractual agreement–between a lender and a borrower. Since there are a number of factors contributing to current mortgage rates, borrowers should be sure to thoroughly research their options before agreeing to a mortgage payment plan.
What Determines Current Mortgage Rates?
Economic supply and demand determines current mortgage rates. The best mortgage rates usually occur when the economy slows down. During economic deceleration, the Federal Reserve cuts home mortgage rates in an effort to cultivate the economy. Once the economy speeds back up, however, the Federal Reserve raises interest rates to control economic growth and inflation.
Indicators Predicting Current Mortgage Rates
The Consumer Price Index indicates inflation. Inflation is directly proportional to current mortgage rates. The higher the inflation, the higher the mortgage rate, and vice versa.
The Employment Cost Index measures the way in which wages, salaries and benefits alter over time. Rising labor costs force businesses to increase prices. Increased prices push current mortgage rates higher.
The Gross Domestic Product measures the nation's supply and demand by critiquing its total economic output.
What are the Current Mortgage Rates?
HSH Associates, the world's leading publisher for mortgage and consumer information, publishes a weekly sample of interest rates derived from surveys of more than 2,000 lenders. The following are some of their findings for the week of Oct. 23, 2006.
15-Year Fixed Rate Mortgage: Down payments range from 5 to 20 percent, with a common interest rate of 6 percent.
30-Year Fixed Rate Mortgage: Down payments lean closer to 5 percent, although a few lenders go as high as 20 percent. The average interest rate is about 6.12 percent.
1-Year Adjustable Rate Mortgage: Most lenders have their down payments set around 10 percent. Interest rates range from 5 to nearly 8 percent.
5/1-Year Adjustable Rate Mortgage: Lenders currently tend to stick closer to 20 percent for their down payments with this type of mortgage. Interest rates, however, vary near the 6-percent mark.
Though fixed and adjustable are the two main types of mortgage rates, they include several subcategories. Assumed mortgage rates, for example, fluctuate along with current market trends. Balloon mortgages include interest-only monthly payments, followed by a balloon sum after a fixed period of time. Seasoned mortgages have short payment periods and work best for those paying several mortgages in bulk.
To figure out which company has current mortgage rates best-suited to a particular need, contact several local lending agencies. Remember to be patient and shop around for the best rates. Web sites like Bankrate.com can help locate nearby creditors.
Wikipedia. 2006. 25 Oct. 2006. < http://en.wikipedia.org/wiki/Mortgage>
HRH Associates Financial Publishers. 2006. 25 Oct. 2006.
Bankrate. 2006. 25 Oct. 2006. < http://www.bankrate.com/brm/rate/mtg_home.asp>
CRHOME. 2006. 25 Oct. 2006. < http://www.crhome.com/mortgage-rates.htm>
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