February mortgage rates rock, fall to surprising new record lows
Mortgage rates began February with a bang. A big bang.
All four of the widely used home loans we track fell to new record lows in Interest.com’s new survey of major lenders.
Back in December, we projected that anyone looking to buy a house or refinance in 2012 should be able to take advantage of record-low rates well into the new year.
But even we didn't expect interest rates would fall this low.
The biggest decline over the past week was for the most popular kind of loan, the 30-year, fixed-rate loan.
The average cost for those loans fell from 4.25% in late January to 4.12% this week, shattering the previous record low of 4.18% set in early to mid-January.
That's a full-point less than borrowers were paying last February when these loans cost more than 5%.
A drop like that is enough to shave more than $60 a month off your mortgage payments for every $100,000 you borrow.
And remember, these are the average rates lenders are charging.
The other big news of the week is that President Barack Obama presented a new refinance program designed to help "responsible" underwater homeowners take advantage of these record-low interest rates and cut their payments.
Although it ran into immediate opposition from Republicans in Congress, at least someone is talking about the 11 million homeowners who can't refinance because they owe more on their loans than their houses or condos are currently worth.
Our Feb. 1 survey found the average interest rate for a:
30-year, fixed-rate jumbo loan -- which, depending on the city, can be $417,000 to $625,000 -- decreased from 4.62% last week to 4.55% this week. The previous record low for this type of loan was 4.58% reached on Jan. 18.
15-year, fixed-rate loan dropped from 3.45% to 3.34% this week. The previous all-time low for 15-year rates was 3.38% recorded on Jan. 11.
5-year, adjustable-rate loans -- loans where the initial interest rate remains fixed for the first five years and then changes once a year -- fell to 3.02% from 3.09%. Rates for 5/1 ARMs reached their previous low, 3.04%, on Jan. 11.
Our database of interest rates can help you find the best deals in your area, including many that are less costly than the national averages.
You can use our mortgage calculator to determine the monthly payments for the exact amount you want to borrow with this or any home loan.
It will also provide a month-by-month amortization schedule that shows how much you've reduced your debt and how much you still owe.