Current Mortgage Rates

Saturday, September 06, 2008



Before you start looking at homes, you need to have some idea of what you can afford. It can save you much time and trouble by making certain you are looking in the correct price range.

There are three main factors that will weigh into how much home you can ultimately afford:
  • your monthly income (before taxes);
  • long-term debts;
  • cash you can accumulate for a down payment and closing costs.
How much you borrow also depends on where interest rates are at any given time. If interest rates are at 8 percent for a 30-year fixed-rate loan, and you have 20 percent to put down in cash, with few or no debts, many lenders will allow you to buy a home equal to three times your family's annual income. Conventional lenders allow you to spend up to 28 percent of your gross monthly income (GMI) on your mortgage, taxes and insurance, and up to 36 percent of GMI on your total debt, including school and auto loans, and credit card debt. If you have no other debt, a lender will let you spend up to 36 percent of GMI on your mortgage insurance and taxes.

The amount that you can borrow, sometimes referred to as 'borrowing capacity', will depend on your current income and expenditure. Using this information the lender will determine the maximum amount they will allow you to commit to a home loan repayment each month. Then they will calculate the corresponding maximum loan amount. The maximum amount that you can borrow will vary from lender to lender and is dependent on their individual lending criteria.



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Current Mortgage Rates*

Loan Type
National Average
30-yr. fixed6.38%
30-yr. fixed jumbo7.00%
15-yr. fixed5.88%
15-yr. fixed jumbo6.50%
7/1 ARM6.25%
5/1 ARM6.00%
3/1 ARM5.88%
1-yr. ARM6.00%
1-yr. LIBOR ARM5.50%
10/1 ARM7.88%
*Mortgage Rates Updated: 09/04/2008