Current Mortgage Rates

Tuesday, January 06, 2009



The following fees are generally included in the APR:
  1. Points - both discount points and origination points
  2. Pre-paid interest. The interest paid from the date the loan closes to the end of the month. Most mortgage companies assume 15 days of interest in their calculations. However, companies may use any number between 1 and 30!
  3. Loan-processing fee
  4. Underwriting fee
  5. Document-preparation fee
  6. Private mortgage-insurance
The following fees are SOMETIMES included in the APR:
  • Loan-application fee
  • Credit life insurance (insurance that pays off the mortgage in the event of a borrowers death)
For Adjustable Rate Mortgages, a fully-indexed APR is used that is based on a comparison that is made at each adjustment date of the 'then current' rate plus 2% versus the margin plus the index. As part of this calculation, the index is assumed to remain constant throughout the life of the loan. When the underlying indexes are low, it is possible for the fully-indexed APR to be lower than the starting rate on the loan. During the past year the APR was considerably lower than the note rate on most ARM products. In other words, ARM products with the same interest rate can differ in how interest rate will be determined after the initial fixed rate period, and that difference determined the variance in APR.

In addition, that variance will only bring economic impact if the loan is not paid off or refinanced after the initial fixed rate period. The take-away should be: APR should become a variable in a comparison shopping process too. As most people seeking ARM products will refinance or move out of the underlying property within the initial fixed rate period, the initial fixed interest rate should be the first decision factor. But if everything else is equal (interest rate, closing cost, points, etc.), a wise shopper should compare APR as well.




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Current Mortgage Rates*

Loan Type
National Average
30-yr. fixed5.25%
30-yr. fixed jumbo7.12%
15-yr. fixed5.00%
15-yr. fixed jumbo6.62%
7/1 ARM6.25%
5/1 ARM5.75%
3/1 ARM5.88%
1-yr. ARM6.25%
1-yr. LIBOR ARM5.62%
10/1 ARM6.38%
40-yr. fixed6.25%
*Mortgage Rates Updated: 01/06/2009