Current Mortgage Rates

Monday, October 13, 2008



A cap is a limit on how much the interest rate or the monthly payment can change, either at each adjustment or during the life of the mortgage. Most ARMs have an interest rate caps to protect you from enormous increases in monthly payments. A limit on how much the interest rate or the monthly payment can change, either at each adjustment or during the life of the mortgage. Most ARMs have an interest rate caps to protect you from enormous increases in monthly payments. A lifetime cap limits the interest rate increase over the life of the loan. Lifetime caps can vary by lender, but most ARMs have caps of 5% or 6%. A periodic or adjustment cap limits how much your interest rate can rise at one time.

Generally, a 6 month ARM will have a cap of 1% while a 1 year ARM will have a 2% cap. In any circumstance where a loan officer changes the first adjustment cap, (ie. 2/2/5) either intentionally or by mistake. . . (mistakes do happen), the lender should most certainly reconcile the mistake on their end. Once you are locked in, the lender can change the program terms you may be participating in by raising the first adjustment cap (ie. 5%). However, because you are locked into YOUR active agreement, the lender cannot impose the new program terms on you since you are currently protected under the terms of your documented mortgage rate lock.




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Current Mortgage Rates*

Loan Type
National Average
30-yr. fixed6.25%
30-yr. fixed jumbo7.62%
15-yr. fixed5.88%
15-yr. fixed jumbo7.12%
7/1 ARM6.62%
5/1 ARM6.38%
3/1 ARM6.25%
1-yr. ARM5.88%
1-yr. LIBOR ARM6.25%
10/1 ARM8.38%
40-yr. fixed7.12%
*Mortgage Rates Updated: 10/12/2008