Summary: Where do mortgage interest rates stand today, and where are they expected to be in 2020? This article will clarify the state of mortgage rates to help you determine if now is a good time to buy.
30-year fixed rate mortgage rates continue to stay near historic lows as the fall season gets underway.
According to Freddie Mac’s weekly mortgage rate survey of more than 125 banks nationwide, the average 30-year fixed rate mortgage rate is now 3.65% as of the first week of October 2019.
The rate is available to conforming, prime borrowers willing to pay an accompanying 0.6 discount points plus a full set of closing costs. A “prime” mortgage applicant typically has excellent credit, verifiable income, and at least 25% equity in their home.
And, it’s not just the 30-year fixed rate mortgage that continue to stay low, either. The 15-year fixed rate mortgage did, too, now sitting at 3.14%.
The 15-year fixed rate mortgage requires 0.5 discount points plus closing costs.
Discount points are a one-time, up-front closing cost, based on loan size. If your loan requires 1 discount point, that means that your loan has a closing cost equal to 1 percent of your loan size. If your loan requires two discount points, the fee would be equal to two percent of your loan size; and so on.
So, based on this week’s Freddie Mac survey, a home buyer in Bellevue opening a $200,000 mortgage and paying 0.6 discount points would face a one-time $1,200 fee to be paid at closing.
The good news is that discount points are optional.
To avoid paying discount points, simply ask your lender for a “zero points” loan. You’ll get a higher mortgage rate than what Freddie Mac shows in its survey, but you’ll pay fewer closing costs.
Today’s low rates are terrific for both home buyers and existing homeowners looking to make a refinance. As compared to last year at this time, mortgage rates are down by 98 basis points — nearly one full percentage point.
Where Are Mortgage Rates Going To Be In 2020?
According to Freddie Mac, the annual mortgage rate average for 30-year fixed-rate mortgages is expected to be 3.9% in 2019, then dip down to an average of 3.7% in 2020.
Mortgage payments are much lower today as compared to October 2018:
- October 2018: $516.50 principal + interest per $100,000 borrowed
- October 2019: $455.91 principal + interest per $100,000 borrowed
Today’s rates yield an 11.73 percent payment discount as compared to last year.
Mortgage rates are unpredictable so there’s no guarantee that low rates will last forever, much less through the remainder of the year. If today’s rates meet your household budget, consider locking something in.
Need a home loan?
If you’re in the market to buy a home, Sammamish Mortgage is available to help. We offer a wide variety of mortgage programs and tools with flexible qualification criteria. We’ve been helping buyers obtain the mortgages they need in Oregon, Washington, Colorado, and Idaho for over 25 years, and we’d love to help you too. Please contact us today to get started.