Current Mortgage Rates March Higher as Applications for Mortgages Decline

Demand for mortgages declined this past week due to higher mortgage rates and the holiday shortened week. Current mortgage rates on 30 year conventional loans increased 0.10 percent to 4.33 percent today. As a result of higher mortgage rates, loan demand declined 12.8 percent from the week before, according to the Mortgage Bankers Association.

While mortgage rates today are higher than they were just a month ago, rates are still incredibly low. A conforming 30 year mortgage rate under 4.50 percent is a really low rate. In fact, there are lenders offering mortgage rates even lower than the average 30 year rate. Right now in our database we have lenders quoting 30 year mortgage rates under 4.00 percent with points.

Higher Mortgage Rates This Week Zap Refinance Demand

Unfortunately for homeowners looking to refinance, higher rates makes refinancing less attractive. In the MBA report this week, applications to refinance fell the most - down 18 percent week over week, to the lowest level since the first week of September.

Slightly higher mortgage rates haven't killed demand for loans when it comes to home purchases. Mortgage applications to purchase a home fell only 4 percent. Seasonally speaking, this time of year the demand for mortgage loans generally slows down as homebuyers and sellers wait for the new year.

Today's Mortgage Rates on Jumbo Mortgages

30 year jumbo mortgage rates are averaging 4.46 percent today, an increase from last week's average 30 year jumbo mortgage rate of 4.41 percent. If you're shopping for jumbo rates, we have lenders in our database quoting rates below the average and below 4.00 percent, depending on the state in which you live.

Today's mortgage rates on 15 year jumbo mortgage loans are slightly higher this week, averaging 3.74 percent. Last week's average 15 year jumbo mortgage rate was lower at 3.69 percent. The lowest 15 year jumbo rates in our database are lower than the average, which is around 3.25 percent.

Refinance to a 15 Year Mortgage Instead of Another 30 Year Mortgage

Today's mortgage rates on 15 year conforming mortgages also rose this week to 3.46 percent, an increase from the previous week's average 15 year mortgage rate of 3.36 percent. If you're thinking about refinancing a 30 year loan, have you considered refinancing to a shorter term loan?

Refinancing from a 30 year loan to a 15 year or even 10 year loan will save you an incredible amount of money in the form of interest payments. On a $400,000 loan you will save hundreds of thousands of dollars in interest payments with a 15 year loan instead of a 30 year loan.

Using our mortgage calculator to compare the difference on a $400,000 loan, the total mortgage interest payments on a 30 year loan with a rate of 4.33 percent comes to $315,153.34.  For a 15 year $400,000 loan with a rate of 3.46 percent, the total interest payments come to $113,302.34. That is savings of $201,851.00!

The one drawback to a 15 year loan over a 30 year loan is that your monthly payments will be higher. Using the example above, the monthly payment on the 30 year loan is $1,986.54, whereas the monthly payment on a 15 year loan is $2,851.68.  The difference of $865.14 a month may well be worth it.
Author: Brian McKay
December 4th, 2013
Posted in: Mortgage Rates