Current Mortgage Rates

Tuesday, December 02, 2008



The annual percentage rate (APR) is an interest rate that is different from the note rate. It is commonly used to compare loan programs from different lenders. The Federal Truth in Lending law requires mortgage companies to disclose the APR when they advertise a rate. Typically the APR is found next to the rate. The APR your lender quotes you will include other fees too, but APR doesn't tell the whole story. There are other fees and costs, such as title insurance, that are still not included in the calculation. And in the end, APR is nothing more than an estimate of the various costs of your loan, including the interest rate. It is not an exact science, since some of the numbers will vary between the time of calculation and the time of closing.

Nonetheless, it's a step in the right direction, and one place to start when comparing lenders and the loans they offer. In addition, the APR model is flawed in that when a product is variable and tied to a market index, the index is assumed to never change. This obviously is an invalid assumption that can lead again to a number, which in fact can not be compared, from one quoting source to another.

Finally, the APR won't tell you anything about balloon payments and prepayment penalties or how long your rate is locked for. You can use APRs as a guideline to shop for loans, but you should not depend solely on the APR in choosing which loan is best for your needs.



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Current Mortgage Rates*

Loan Type
National Average
30-yr. fixed5.88%
30-yr. fixed jumbo7.62%
15-yr. fixed5.50%
15-yr. fixed jumbo7.50%
7/1 ARM6.25%
5/1 ARM5.88%
3/1 ARM5.88%
1-yr. ARM6.75%
1-yr. LIBOR ARM6.12%
10/1 ARM7.88%
40-yr. fixed7.00%
*Mortgage Rates Updated: 12/01/2008