That’s the prediction of Freddie Mac according to an article on CNN Money today. The average rate for a 30-year fixed rate mortgage this week was 6.24%, a jump of 0.01% from the week before, compared to rates of 5.57% one year ago. 15-year fixed rate mortgages moved to 5.83%, up 0.02% from a week before, compared to rates of 5.10% one year ago. 5-year adjustable-rate mortgage (ARM) rates are up to 5.89%, an increase of 0.9% from a year ago. One year ARM rates are 5.33%, an increase of 1.22% from a year ago.
Makes you wonder how sure you are about your long term plans (ARM holders, do you really only plan to live there for less than five years?) because the rates are so close right now it doesn’t really seem worth the “risk.”
If you have a $300,000 30-year fixed rate mortgage, a 6.24% interest rate puts your monthly payment at $1,845.20. If you have a 5-year adjustable rate mortgage at 5.89% interest, the payment is $1,777.49. The difference is $67.71 per month or $812.52 a year. Essentially, you are being paid $812.52 a year to carry the risk of an ARM (on a $300k mortgage).
Figures from CNN Money .