Mortgage rate by year spread starting to make a little sense again

[GON]

In November 2020, we refinanced a home loan at 2.25 percent, 30 year. We wanted a 15 year loan, and the rate was at 2.43 percent. Made no sense to me, but we chose the 30 year with the lower rate.

This morning on fox business dot com, they are reporting the following as current home mortgage rates:
30 year fixed- 5.81%
15 year fixed- 4.92%
adjustable- 4.4%

Seems the difference between 15 year and 30 year now makes sense, with 15 year mortgages having a real difference in percentage from the 30 year mortgage.

Mortgage rates hit 5.81%, highest level since November 2008

Mortgage rates have hit 5.81% — the highest level since 2008 — ramping up pressure on homebuyers already feeling squeezed in the current real estate market.

www.foxbusiness.com

 

[Duffyjr]

It's been a long time since we refinanced our mortgage but did you figure up how much more interest you will be paying over that extra 15 years?

One word of advice I can give is pay a little extra every month, we did that and paid off a 30 year loan in 22.

 

[Lubener]

It's been a long time since we refinanced our mortgage but did you figure up how much more interest you will be paying over that extra 15 years?

One word of advice I can give is pay a little extra every month, we did that and paid off a 30 year loan in 22.

Good advice, a good feeling being debt free and not owing to the "man".. I did the same and paid off my 15 year mortgage in 12 years.

 

[JeffKeryk]

My goal was to minimize interest expense. I had numerous loans over the years, all adjustables. I doubt I had any more than 3 years. Refi refi refi. And then refi again.

 

[Passport1]

Bought my new house in Oct. 2021. Rate was 2.85 for a fixed 30. At my age thinking about a shorter payoff is kind of a wishful fantasy. I think it's odd that a mortgage company would take such a long term risk on an old geezer like me anyhow. Did a refi on the beach house at the same time. Got 2.23 for 30. Same logic. Both houses have tremendously increased in value in a short time. Real estate is the only good investment today.

Sad but doubt we'll ever see rates like that again in a lifetime or more. I think that for a huge cohort of potential buyers inheritance or a lotto ticket is the only strategy for becoming a homeowner.

 

[CKN]

Bought my new house in Oct. 2021. Rate was 2.85 for a fixed 30. At my age thinking about a shorter payoff is kind of a wishful fantasy. I think it's odd that a mortgage company would take such a long term risk on an old geezer like me anyhow. Did a refi on the beach house at the same time. Got 2.23 for 30. Same logic. Both houses have tremendously increased in value in a short time. Real estate is the only good investment today.

Sad but doubt we'll ever see rates like that again in a lifetime or more. I think that for a huge cohort of potential buyers inheritance or a lotto ticket is the only strategy for becoming a homeowner.

We bought our first house and interest rates for first mortgages were 16%. It was the late 70's-early 80's. People then stated what you did and of course history has proven that to be false.

 

[JeffKeryk]

We bought our first house and interest rates for first mortgages were 16%. It was the late 70's-early 80's. People then stated what you did and of course history has proven that to be false.

Ha ha ha! My 1st mortgage was on a nice little condo, 2/1 with a carport, maybe 850 sq ft, for 10% and 5% down. I was lucky to get it!
Wish I still had that place.

 

[pghvolvo]

I remember in the late seventies where someone would buy a home and was thrilled to be able to assume the existing 7.0-7.5% mortgage. At the time the mortgages were running around 9.0% to 10%.

 

[Barkleymut]

I think that for a huge cohort of potential buyers inheritance or a lotto ticket is the only strategy for becoming a homeowner.

if a young couple makes $80k / year combined (a fairly realistic #) there is no reason that they cannot afford a reasonably priced house in my area.

 

[CKN]

I remember in the late seventies where someone would buy a home and was thrilled to be able to assume the existing 7.0-7.5% mortgage. At the time the mortgages were running around 9.0% to 10%.

Yes-we actually assumed a mortgage on that first house-the balance was like $15,000.00. Not much.

 

[CKN]

if a young couple makes $80k / year combined (a fairly realistic #) there is no reason that they cannot afford a reasonably priced house in my area.

Had a couple on our local Salt Lake news in regards to the current Real Estate situation. He was a school teacher. Medium price is now $500,000.00 in Salt Lake County. They have relocated to Texas and bought their dream home for $225,000.00 and got a new job in teaching. So now-in any desirable area-basically "The West" is not affordable. This would include California, Oregon, Washington, Idaho, Colorado, Nevada, Arizona, and Utah. Also many parts of Wyoming and Montana.

 

[PimTac]

Had a couple on our local Salt Lake news in regards to the current Real Estate situation. He was a school teacher. Medium price is now $500,000.00 in Salt Lake County. They have relocated to Texas and bought their dream home for $225,000.00 and got a new job in teaching. So now-in any desirable area-basically "The West" is not affordable. This would include California, Oregon, Washington, Idaho, Nevada, Arizona, and Utah. Also many parts of Wyoming and Montana.

Yep and the price of rent has followed that trend. Around here $1700 a month will get you a studio. Want a two bedroom unit? That will be well north of $3000 a month.

The side effect of all this is the bedspace market where people are renting out enough room for someone to throw a sleeping bag down along with access to a bathroom. $500 might get you that but the conditions depend on how many are in the house or unit.

 

[Dave Hess]

if a young couple makes $80k / year combined (a fairly realistic #) there is no reason that they cannot afford a reasonably priced house in my area.

What is a “reasonably priced house” in your area ?

 

[alarmguy]

Bought my new house in Oct. 2021. Rate was 2.85 for a fixed 30. At my age thinking about a shorter payoff is kind of a wishful fantasy. I think it's odd that a mortgage company would take such a long term risk on an old geezer like me anyhow. Did a refi on the beach house at the same time. Got 2.23 for 30. Same logic. Both houses have tremendously increased in value in a short time. Real estate is the only good investment today.

Sad but doubt we'll ever see rates like that again in a lifetime or more. I think that for a huge cohort of potential buyers inheritance or a lotto ticket is the only strategy for becoming a homeowner.

No risk, your house will go up in value so very low risk to the bank, the house cant be sold without the bank getting their money first.
IN this case the "bank: is typically Fannie Mae or Freddie Mac

Then, throw in the interest. For the first 15 years its almost all profit for the bank, almost all interest for the first ten years and still the full amount of money is owed on the loan, So if you kick the bucket after paying your mortgage for the first ten years, and your house gets sold, the bank is going to get back all the money that you borrowed to buy the house, this is after you paying the mortgage for the last 10 years.

 

[alarmguy]

Had a couple on our local Salt Lake news in regards to the current Real Estate situation. He was a school teacher. Medium price is now $500,000.00 in Salt Lake County. They have relocated to Texas and bought their dream home for $225,000.00 and got a new job in teaching. So now-in any desirable area-basically "The West" is not affordable. This would include California, Oregon, Washington, Idaho, Colorado, Nevada, Arizona, and Utah. Also many parts of Wyoming and Montana.

Good post, the key takeaway here is the people took charge of their lives, moved and now live in a dream home. Americans never had it more easy, jobs all over if one is willing to "move" to it if its not near them.

 

[Barkleymut]

What is a “reasonably priced house” in your area ?

250k