30-Year Mortgage Rates Surge To 3.69%; Biggest 1-Week Jump In 5 Months

Prepared by Dan Green, mortgage market expert

Current Mortgage Rates Now Average 3.69%

Suddenly, current mortgage rates are at a 6-week worst.

According to Freddie Mac’s weekly Primary Mortgage Market Survey, 30-year conventional fixed-ratemortgage rates climbed sharply last week, reaching 3.69%, on average, nationwide. It’s the highest point for rates since early-January of this year.

Rates rose for other loan types, too, including FHA loans, USDA loans, and VA loans.

Interest rates may be rising, but they’re still ultra-low as compared to all of last year, and as compared to history. It’s an excellent time to consider a refinance of your home, or the purchase of a new one.

Mortgage rates and APRs are firmly grounded in the 3s.

30-Year Mortgage Rates Rise Most In 5 Months

The average 30-year fixed-rate conventional mortgage rate jumped 10 basis points (o.10%) this week to reach 3.69 percent, on average, nationwide. The rate — which is based on a survey of 125 U.S. lenders — is available to borrowers willing to pay 0.6 discount points at closing, plus a full set of closing costs.

Closing costs vary by state and are highest in Texas, Alaska, and New York. Costs are lowest in Tennessee and Nevada.

Borrowers can elect to “waive” closing costs via a zero-closing cost refinance in which the lender pays costs on a borrower’s behalf in exchange for a slightly higher mortgage rate.

A zero-closing cost mortgage typically raises the rate on a $250,000 home loan by one-quarter point.

Freddie Mac reports that 15-year mortgage rates increased last week, as well.

The popular, shorter-termed loan climbed 7 basis points (0.07%) to 2.00%, on average, nationwide. This is the 5th straight week that 15-year interest rates have been in the 2s.

Freddie Mac’s published rates are available to prime mortgage borrowers.

A “prime borrower” is defined as one with a credit score of 740 or higher; with a purchase downpayment of twenty percent or more; with a debt-to-income ratio which meets mortgage guidelines; and, with ample reserves to support a mortgage approval.

Loans for prime borrowers are loans made against single-family residences including detached homes, certain town homes and attached properties; and condos which meet minimum eligibility standards.

The Freddie Mac survey does not reflect FHA mortgage rates or VA mortgage rates, nor does it show rates the for no-money-down USDA loan. Freddie Mac’s figures are for conventional loans only.

Today, it’s common to receive a rate quote in the 3s and APRs are similarly low.

You’re Likely “In The Money” To Refinance

Today’s 30-year mortgage rates average 3.69% nationwide. Against historical averages, this is dirt cheap. Since 1971, 30-year rates have averaged near 8.25%.

Rates are also cheap as compared to 2014.

A homeowner whose mortgage is 6 months old can refinance to today’s interest rates, save $66 per month for every two-hundred thousand borrowed, and lower total mortgage interest costs by $22,000 over the life of the loan. Apply the same $66 savings back to the mortgage monthly, and reduce your loan to just 26 years.

Refinance savings are even bigger for other homeowners.

Millions of U.S. homeowners are currently in the money to refinance. “In the money” means that you stand to reduce your mortgage rate by 150 basis points (1.5%) or more, and have sufficient home equity to refinance.

There are six commons refinance programs from which to choose:

  1. The Home Affordable Refinance Program (HARP) : For homeowners with underwater conventional loans which pre-date June 2009
  2. The Fannie Mae 97 LTV loan : For homeowners with conventional loans and 3% home equity or more
  3. The FHA Streamline Refinance : For homeowners with an existing FHA loan who want to lower their mortgage rate and payment
  4. The VA Streamline Refinance : For homeowners with an existing VA loans who want to lower their mortgage rate and payment
  5. The USDA Streamline Refinance : For homeowners with an existing USDA loan who want to lower their mortgage rate and payment
  6. The Conventional Refinance : For homeowners with at least 10% home equity wanting to refinance a conventional loan, or to refinance away from FHA mortgages or some other loan type

Current Freddie Mac data shows that the median age of a refinanced mortgage was 7.4 years last year. This means that the typical refinancing U.S. homeowner lowered their mortgage rate 217 basis points (2.17%) — a savings of more than 35 percent per year.

And, don’t be concerned for closing costs, either.

Long-term, a refinance to low interest rates will save more money than it costs — especially when the refinance is a  zero-closing cost refinance. Homeowners saves tens of thousands of dollars. Sometimes more.

It’s an excellent time to explore your refinance options.



Realtor with Greg Garrett Realty, actively licensed in the state of Virginia

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