Mortgage Rates Today
As of August 16th, the Freddie Mac national average for 30-year mortgage rates was 4.53%. The average rate for 15-year mortgages was 4.01%, while 5/1 ARM mortgage rates averaged at 3.87%. This marks the second straight week of declines in August for 30-year, 15-year and 5/1 ARM mortgage loans. After rising almost 8 basis points earlier this month, mortgage rates seem to be back where they were in July.
U.S. Mortgage Rates Over Time
Mortgage Rates This Week
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Rates have fallen week-over-week, as a slight lull in the late homebuying season has kicked in. As the season draws to a close, homeowners should keep an eye on the Federal Reserve, which has forecasted possible rate increases in September and December. In the long run, it's likely that interest rates for mortgages and other types of credit will continue to rise in response to Federal Reserve policy, making it more costly to refinance your home over time.
There are a few reasons that interest rates for mortgages and other loans will probably keep climbing. Continued economic growth has prompted the Federal Reserve to implement steady increases in the prime rate, which is the rate that banks pay to borrow funds. As it becomes more costly for mortgage lenders to obtain money, they pass on their increased expenses to borrowers in the form of higher interest rates on mortgages and other kinds of credit.
Should You Refinance Your Mortgage Now?
If you're thinking about refinancing in 2018, the long-term rise of interest rates means that you should start shopping for mortgages soon. To understand the savings at stake, consider that a $400,000 balance for a 30-year loan at August's average rate of 4.59% would cost $2,048 before taxes and insurance. At February's average rate of 4.38%, that balance would cost $1,998 monthly—a difference of $50 per month and over $17,000 in lifetime interest.
For homeowners considering a cash-out refinance, higher mortgage rates mean that it may be more efficient to obtain a home equity line of credit (HELOC). If most of the rates above are higher than your original mortgage rate, then a cash-out refinance would mean paying a higher rate on your entire balance for the full remainder of your mortgage term. By contrast, HELOC borrowers only pay interest on whatever amount of credit they decide to draw.
While HELOC rates do tend to be higher than cash-out refi rates, getting a HELOC would allow you to keep a lower rate on the rest of your mortgage debt.
More Mortgage Tips & Analysis
For more information on how to navigate the mortgage experience, take a look at our informational guides and reviews of popular mortgage lenders.
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