After Hitting Record Lows Mortgage Rates Fall Again

The 30 year rate dropped this week from 4.69 to 4.58. This is quite a large drop for a week. What makes it even more interesting is that 4.69 from last week was already an all time historic low. We are moving into territory for mortgage rates I would have never thought possible.

While the 30 year rate is the mortgage product that is the most widely used some of the other mortgage products made records as well. The three other mortgage products all hit all time lows last week. Two of the other three mortgage products fell further this week. The 15 year dropped from 4.13 to 4.04. The 5 year arm dropped from 3.84 to 3.79 and the 1 year arm rose from 3.77 to 3.80. Below are rates from the weeks from Jun 03, 2010 to Jul 01, 2010

Jul 01, 2010
30-fixed 4.58 15-fixed 4.04 5 ARM 3.79 1 ARM 3.80

Jun 24, 2010
30-fixed 4.69 15-fixed 4.13 5 ARM 3.84 1 ARM 3.77

Jun 17, 2010
30-fixed 4.75 15-fixed 4.20 5 ARM 3.89 1 ARM 3.82

Jun 10, 2010
30-fixed 4.72 15-fixed 4.17 5 ARM 3.92 1 ARM 3.91

Jun 03, 2010
30-fixed 4.79 15-fixed 4.20 5 ARM 3.94 1 ARM 3.95

Dec 17, 2009
30-fixed 4.94 15-fixed 4.38 5 ARM 4.37 1 ARM 4.34

So now that we have seen rates lets look at actual mortgage payments. We took today's rates and used a mortgage calculator to translate them into a payment on a 200k loan. We also did the same thing with rates from June, 17 2010 (2 weeks ago) and rates from December, 17 2009 (6 months ago)

Jul 01
30-year $1022.89
15-year $1483.38
5-year ARM $930.77
1-year ARM $931.91

Jun 17
30-year $1043.29
15-year $1499.5
5-year ARM $942.19
1-year ARM $934.19

Dec 17
30-year $1066.32
15-year $1517.74
5-year ARM $997.98
1-year ARM $994.44

Compared to June 17th mortgage payments are 1.95 less today for a drop of $20.40 a month on a 200k loan. Compared to December 17th, 2009 mortgage payments are 4.07 percent less for a drop of $43.43 a month.

So what is going to happen moving forward? We are pretty much in uncharted territory. With rates now significantly below what we have seen before it will be interesting if they continue to fall. In the short term it's hard to know where rates are going to go. I don't see rates falling below 4.3. Once the economy improves rates will move up and perhaps drastically so. For awhile it seemed the economic recovery was rather strong. If we see a double dip recession we could see rates stay low for awhile.

By: Dane Smith

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Ki developed a website to serve Austin Texas real estate investors. It also has several mortgage rate widgets for people to keep up with the market along with a mortgage calculator widget.