Average Mortgage Rate Comparison
Four of the most popular types of mortgage loans are displayed below. This handy mortgage rate comparison provides a clear definition of each type of loan, as well as the current average interest rate for each type.
30-yr Fixed
This type of loan has 360 monthly payments that remain the same for the entire 30 year period after which time the loan is paid in full. The monthly payment is based on an interest rate which does not change over the term of the loan (hence the term "fixed rate"). This product is a "conforming" loan that applies to loans that are for less than a certain threshold loan amount. That threshold varies from $417,000 to $729,750 depending on the location of the property.
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30-yr Fixed
4.498% |
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15-yr Fixed
This type of loan is the same as the 30 year fixed rate loan except the life of the loan is 180 months as opposed to 360 months. Since the loan is being paid off faster than the 30 year fixed rate loan, monthly payments for this type of loan are higher than payments for the 30 year fixed rate loan. In addition, generally the longer a lender agrees to keep the interest rate “fixed”, the greater the risk to the lender, therefore, in most instances, interest rates on 15 year fixed rate loans are slightly lower than 30 year fixed rate loans. This product is a “conforming” loan that applies to loans that are for less than or equal to $417,000.
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15-yr Fixed
3.999% |
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30-yr Fxd Jumbo
This loan product is the same type of loan as the 30-yr fixed rate “conforming” loan except this product applies to “jumbo” loans that are loans for more than $417,000. Generally, interest rates for a “jumbo” loan product are slightly higher than rates for the same type of loan that is a “conforming” loan product.
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30-yr Fxd Jumbo
5.036% |
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5/1 ARM
This type of loan has monthly payments that are based on a 30 year repayment schedule and the interest rate remains fixed for the first 60 months (five years). After that time the interest rate (and, therefore, the monthly payments) may change every 12 months (one year). This is referred to as the "adjustment period". The new rate is based upon fluctuations in an index (typically the One Year Treasury Security) and is calculated by adding a specified amount to the index. The amount that is added to the index is called the "margin" (typically 2.50% - 3.00). For example, if the index equals 5.00% at the time of adjustment and the margin equals 2.75%, the new interest rate would be 7.75%. However, this type of loan program usually has limits on how much the interest rate can change (either up or down) at each adjustment date, compared with the interest rate being charged before the new adjustment is made. Typically, this limit is 2% and is referred to as an “adjustment cap”. There is also a limit as to how much the interest rate can change (either up or down) from the initial interest rate over the entire life of the loan (typically 6%) and this is referred to as a "lifetime cap". The monthly payment changes, as needed, at each adjustment period, to reflect the adjusted rate.
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5/1 ARM
3.283% |
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