Mortgage Rates Up Slightly

Mortgage rates continued to climb this week, with the average rate on the benchmark 30-year fixed mortgage rising for the third consecutive week, to 3.86 percent according to Bankrate.com’s weekly national survey. The average 30-yearfixed mortgage has an average of 0.42 discount and origination points. But, let’s keep these numbers in perspective. These rates are about where they were aroundJuly 4th of this year.

The average 15-year fixed mortgage rate inched higher to 3.05 percent as did the larger jumbo 30-year mortgage, moving to 4.41 percent. Adjustable mortgage rates increased as well, with the 3-year ARM jumping to 3.06 percent, and the 5-year adjustable moving up to 2.93 percent.

Mortgage rates increased for a third straight week as all remains quiet on the European front and the tone of U.S. economic data has improved. Nervous investors have unwound some of the safe-haven trades that helped bring bond yields and mortgage rates lower. Whether the upward trend can be sustained depends on what happens on both sides of the Atlantic, with the European debt crisis and the path of the U.S. economy.

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The last time mortgage rates were above 6 percent was Nov. 2008. At the time, the average 30-year fixed rate was 6.33 percent, meaning a $200,000 loan would have carried a monthly payment of $1,241.86. With the average rate now 3.86 percent, the monthly payment for the same size loan would be $938.76, a difference of $303 per month for anyone refinancing now.

It remains to be seen if these numbers are just an anomaly or the signs of a legitimate trend. Data to be released in the comingweeks will help determine the strength of the recovery. Yet, there is no crystal ball to determine where the rates will be in another month. If refinancing makes sense, then speak with a qualified mortgage representative to discuss your options.

Source: Bankrate