Mortgage Rates Hit Record Lows

By// Chandler Rollins

The decrease in housing prices and the recent drop in mortgage rates has made affording a home very easy. Just this week, the 30-year and 15-year fixed rate loans have fallen, again. The 30-year dropped to 3.31 percent and the 15-year rate dropped to 2.63 percent. Keith Gumbinger, the vice president of mortgage information company HSH, told CNN Money that current borrowers and new home buyers should take advantage of these record low numbers with short term loans. Les Christie of CNN Money writes:

The numbers add up like this: Homeowners current paying off 30-year loans with rates of 4% spend about $1,098 a month in mortgage payments on a $200,000 balance, paying a total interest cost of $143,739,” he said.

Refinancing at 2.63% for 15 years would cost them about $250 a month more, but they would wind up paying just $42,250 in total interest and their payments would end years earlier.

Refinancing into another 30-year loan at 3.31% would cost homeowners only $877 a month, saving $221 from the existing loan. But the total interest paid would come to $115,725 over the life of the loan, a difference of more than $73,000 compared with the 15-year mortgage.