15-year fixed mortgage rates are below 4%
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Facebook it! | 08/20/10
Nine years ago when I got a 30-year mortgage for my first house, people said that I got a really good rate: 5.875%.
Now, if I still had that mortgage, it would almost be a no-brainer for me to refinance to a 15-year mortgage. I saw that rates were 3.875% for a fixed 15-year mortgage! Refinancing my 30-year mortgage with the principal balance at what it would have been at the beginning of year 10, to a 3.875% 15-year mortgage, would have been only $35 more per month! It would knock six years’ worth of payments off just like that. That’s telling, because I didn’t have a bad rate to begin with.
You may have seen advertisements in the past for similar low rates (in the low 4% range or even less) but those loans were likely adjustable-rate mortgages. The advertised rate was a teaser rate, and it was subject to change after a certain number of years. People with these kinds of mortgage were shouldering interest-rate risk.
The low-4%, even below-4% mortgages available now are extraordinary because they’re fixed-rate. The difference between fixed-rate and adjustable-rate mortgages is just that: fixed-rate mortgages cannot vary over the life of the loan! There is no tease in that rate. It is the rate! Fixed-rate mortgages haven’t been this cheap in my lifetime, and I was born in the early 1970s.
Now, this shouldn’t be an excuse to run out to get a house as fast as you can if you aren’t in the market. But if you are in the market, or if you’re in the market for a refinance, comparing mortgage rates now will likely be very pleasant. It’s a fixed-rate gift from the cheap money fairy, if you will. 
(Thanks to Provident Planning for including this post in the Carnival of Personal Finance!)
7 Responses to “15-year fixed mortgage rates are below 4%”
By The Yakezie on Aug 20, 2010 | Reply
Pretty amazing right? Definitely good for the economy as liquidity feeds through the system.
By Lew Corcoran on Aug 20, 2010 | Reply
Mortgage rates are lower today that they were in the 1950s! For 30 year fixed mortgages, the rate today is as low as 4.25% with no points. For 15 year fixed mortgages, it’s as low as 3.75% with no points. You can find adjustable rate mortgages in the low 3s today!
By Tom Gores on Aug 23, 2010 | Reply
Although they are lower today, there are times that people don’t pay and what they will do is for them to escalate it into debt.
By Lop at Rebates Money on Aug 23, 2010 | Reply
This is quite amazing! Rates are so good, I wouldn’t mind looking into the rental market again. Any recommendation on who to go with for refinancing?
By mbhunter on Aug 24, 2010 | Reply
@Lop: Lenders compete all of the time. You can search a number of lenders at the same time for a given state, loan amount, and loan type (you would choose “refinance” as the type) by checking here.
By The Yakezie on Aug 24, 2010 | Reply
Howdy MB Hunter, just wanted to let you know that Dr. Dean gave you a shoutout in his latest Member Post on Yakezie.com.
Cheers
By ranch111 on Sep 12, 2010 | Reply
We are refinancing a 6.25% 30-year FHA loan to a 3.75% 15-year conventional. Getting rid of the PMI. Taking control of the ripoff escrow. Our P&I went up about $65. I think we can handle it.