September 7th, 2019 8:57 AM by Jackie A. Graves, President
If you're in the market
to buy a home, you're likely laser focused on listing prices to keep you within
your budget. The price tag is certainly important, but don't forget to factor
in mortgage rates when it comes to your purchasing power.
Current mortgage rates
are still low, making it a good time to buy. In fact, locking in at
today's rates could make a home that was once unaffordable, affordable.
It's unlikely that the
average 30-year fixed mortgage rate will return to its all-time record low in
2012 of 3.31%. However, mortgage rates are still low compared to almost any
year since Freddie Mac began tracking rates in 1971. Today, the average 30-year
fixed mortgage rate is around 3.6%—
down from 4.53% a year ago.
3.31% - all-time low in
3.6% - today
4.53% - last year
6.29% - avg. rate from
2000 - 2009
18.63% – all-time high
* Mortgage payments are based principal and interest only, based on a
$250,000 fully amortizing mortgage. All terms are assumed to be 30 years.
As you can see, mortgage
rates play a big role in how much home you can afford and it's important to watch them carefully if you're in the
market to buy. The savings from securing a 3.6% rate versus 4.53% on a 30-year
fixed-rate mortgage is $121 per month – $10 more than the average monthly electric
bill in the United States. The savings add up fast, and over the life of a
30-year fixed-rate loan, you'd save a total of $43,560 on interest payments.
Buying a home is a big
investment — perhaps the biggest one you'll make in your life. If you've
done your homework and are ready to make your purchase, your stars may be
Be sure to check out our Fixed-Rate
Mortgage calculator to crunch your own numbers and visit My Home® by
Freddie Mac for more information on buying a home.
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