Mortgage rates today continue to slide as investors seek safety in government bonds. Uncertainty in the stock market and the falling price of oil have sent investors looking for less volatility. This move to safety has put pressure on the 10-Year Treasury yield which dropped to its lowest level in 3 months.
Mortgage rates are known to follow moves in the 10-Year Treasury yield and that’s exactly what has happened over the last few days. Lower mortgage rates on 30-yr and 15-yr home loans are the silver lining during a rocky time in the stock market.
We believe that mortgage rates have moved to a point where we are now in the Refi Red Zone. This means that there is significant savings to be realized by homeowners that refinance their mortgages.
Here’s what homeowners should consider before refinancing.
Comparing Mortgage Rates Today
Looking at mortgage rates from Freddie Mac just a few weeks ago reveal that there is significant savings for homeowners wanting to lower their rate.
Running a Lenda scenario for a $300,000 mortgage loan with an approximate home value of $500,000 and a credit score of 740+ shows today’s mortgage rates (includes discount points).
If you’re current $300,00 mortgage is at 4.01% on a 30-Year home loan your monthly payment is approximately $1,433.98 and the total amount of interest paid over the life of the loan would equal $216,231.35.
If you decided to refinance your mortgage to Lenda’s lower rate of 3.375% your monthly payment would go down to $1,326.29 and the total amount of interest paid over the life of the loan would equal $177,463.91.
Total interest savings of $38,767.44 over the life of the loan. You can probably think of better uses for that money than paying it to a bank as interest. Remember, the larger the loan amount, the larger the savings.
Get a quote now and see how much you can save.
There is extensive information on this website about when it makes sense to refinance your mortgage. The best thing you can do is get a free rate quote and compare what you see to your current mortgage terms.
Here are a few other things to consider before pulling the trigger on refinancing:
- How long are you planning to own the home you’re refinancing? Calculate a breakeven point before refinancing.
- What is your credit score? Make sure you understand how your credit score impacts the mortgage rates you can qualify for.
- Why do you want to refinance? Cash out equity? Lower rate and payment? Knowing your goals up front will help you choose the right product for your situation.
People who use Lenda to refinance their mortgages have seen significant savings. The average Lenda user, who refinances to lower their rate, saves an average of $399.71 on their monthly mortgage payment and over $8,000 in interest payments over the term of the loan.
Should You Lock Your Mortgage Rate?
If you decide that refinancing makes sense for you, then it’s best to act quickly. Some homeowners hesitate to lock-in a low interest rate, but it’s riskier to not lock-in a rate. There’s no obligation to complete a loan just because you locked the rate. However, if you don’t lock-in a rate and mortgage rates go up, there’s nothing you can do to get that lower rate back.
Act quickly and lock your rate. The faster you move through the process the quicker you get to enjoy the savings.
We hate pounding our chests about interest rates going lower, but they have. Plus we can't predict what will happen to rates in the future. So if you've been sitting on the fence now is a good time to seriously consider taking action. You can get started right now by getting a free, custom rate quote.