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In Utah, the current average for a 30-year fixed-rate mortgage is 3.74%. The 15-year fixed-rate averages at 3.27%, while the 5/1 adjustable-rate mortgage (ARM) average is 3.49%.
|Loan type||Average rate||Weekly change||3-month change|
|Loan type||Average rate||Weekly change|
Like most interest rates, mortgage rates go up or down in response to changes in the economy. Sometimes, these changes offer an opportunity to reduce your loan costs by locking in your rate at the right time. To help you achieve this goal, we analyzed the current interest rates for multiple loan types and dozens of lenders in the Beehive State.
How Much Do Utah Mortgage Rates Vary?
In today's market, there's a difference of 150 basis points between Utah's highest and lowest home loan rates. On a typical 30-year mortgage, rates in the state vary from 3.25% up to 4.75%. To clarify what this means for your budget, we can apply these numbers to a theoretical loan of $200,000.
Assuming a 20% down payment of $40,000, your 30-year mortgage for $160,000 could cost $90,679 to $140,469 in lifetime interest. That's a difference of $49,790 between the lowest and highest rates currently available in Utah. Of course, there's a far smaller cost difference if you decide to sell your house in just a few years.
Comparing Home Loan Rates by Bank
While mortgage rates tend to be pretty similar across the industry, we still examined home loan rates at Utah's largest banks to see if there were any variations that might matter to a borrower.
As in most markets, Utah's major mortgage lenders don't stray too far from one another in rate. However, we did find potential opportunities for borrowers willing to shop around. The difference between the highest and lowest 30-year mortgage rate among the state's five biggest companies came out to just over $36 per month on principal and interest, or a lifetime difference of roughly $13,000.
Are Home Loan Rates Rising in Utah?
At the end of 2018, home loan rates in Utah looked set to increase gradually. However, the latest announcements from the Federal Open Market Committee (FOMC) suggest that interest rates across the country may remain stable for the time being, as it awaits further clarity before making additional policy changes.
FOMC actions don't have an immediate or precise impact on mortgage rates, but the connection certainly exists. If the FOMC aims to raise rates by 25 basis points, then borrowers could reasonably expect mortgage rates to head upwards at some point. The latest news from the Fed suggests that Utahns worried about immediate increases can relax for now, as the FOMC has chosen to wait and watch.
While you should always strive to secure the best deal on your mortgage, there are several reasons why interest rate isn't the first thing to consider when you actually buy a house. Financially speaking, choosing a reasonably priced property will do far more to ensure an affordable mortgage than scrounging for the lowest rate. Besides, rates are still at historic lows even in spite of the recent upward trend. Finally, it makes little sense to wait for a "perfect" rate environment if your personal and family circumstances make it logical to proceed.
Comparing Home Loan Rates in Utah Cities
We also considered the average rate of mortgages in each of Utah's major cities to see if location had any impact on the price of home financing. In general, Utahns in the largest metropolitan areas can expect both rates and property prices to stay relatively consistent across the state.
|MSA||Average mortgage rate||Median home value||Estimated monthly cost|
|Salt Lake City||4.44%||$281,396||$1,172|
Because these numbers represent median and average figures, it's still possible that you'll find individual cases in which either your rate or the value of your home is higher or lower than our findings for each metro. Still, the calculations above for monthly principal and interest should provide a rough idea of how much a typical homeowner in each area can expect to pay before accounting for taxes and insurance fees.
Evaluating Mortgage Options: An Example in Salt Lake City
To illustrate how different mortgage types can affect your bottom line, we can walk through the example of a homebuyer in Salt Lake City. Given that a median home in the state capital is valued around $280,000, let's assume that our buyer closes on a 30-year mortgage for $224,000 after a 20% down payment.
In this standard mortgage scenario, the monthly principal and interest totals $1,166 while lifetime interest comes out to $195,685. However, this isn't the only financing option available. For instance, homebuyers looking for lower monthly payments in the short term can improve their situation by taking on an adjustable-rate mortgage (ARM). Typically, ARMs offer lower rates for a fixed number of years before entering a period in which the rate changes based on an index rate like the LIBOR.
In this example, let's say a 5/1 ARM offers a lower rate of 4% in the first five years, after which you plan to sell the house and settle the loan. The cost of interest during that period would be $42,768—compare this to the first five years of the first scenario, which would cost $50,844 for a difference of over $8,000. Of course, ARMs should be handled with care if you plan to stay in the mortgage for any length of time beyond the initial fixed rate period.
On the other end of the spectrum, you may want to find a mortgage that lets you minimize the time required to own the home free and clear. A 15-year fixed rate loan accomplishes this in half the time, giving borrowers a much lower interest rate and overall savings at the cost of a larger monthly cost. In our example, a 15-year loan at Utah's average rate of 4.28% leads to monthly costs of at least $1,689 and lifetime interest of $79,931.