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For the most part of last year and this year, the fixed mortgage rates have been historically lower than adjustable rates. Now, adjustable rates are racing with fixed mortgage rates.
The average purchase rate for a 30 year fixed rate today is 2.87%
The average mortgage purchase rate for the 2nd most popular fixed rate is 15 years and it stands at 2.14% today.
To compete with the fixed rate the 7/1 ARM purchase rate today is 2.38%
The 5/1 ARM purchase rate today is also at 2.38%
The purchase rate for a 30 year FHA loan rate is 2.25%
Compared to purchase rates the refinance rates are overall lower
The average rate for a 30 year fixed refinance loan is 2.78%
The average rate for the 15 years fixed refinance is 2.10%
The 7/1 ARM refinance average rate today is 2.38% (which is the same as the purchase rate)
The average 5/1 ARM refinance rate today is 2.29%
The average rate for a 30 year FHA refinance is 2.23%
An adjustable-rate mortgage is ideal if the homeowner plans to move before the initial rate period ends because then they won’t risk the rate increase.
The rates are likely to be higher by the time their rate period ends.
And a fixed-rate mortgage is a better deal if they plan to stay in the home for a longer time, so they can keep the rates low.
Reference Source: Business Insider
