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Fixed mortgage rates: How low will they go?

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Melanie Stetson Freeman/The Christian Science Monitor/File

(Read caption) Natick, Mass., real estate agent Beth Byrne signs papers to refinance the mortgage on her own home in this 2009 file photo. As of October 2011, fixed mortgage rates for a 30-year loan are hovering near 60-year lows.

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Fixed mortgage rates are at their lowest in six decades. Investors, scared off by eurozone woes, are piling money into US Treasurys, pushing interest rates down. The Federal Reserve has embarked on a program to lower rates even more.

So is it time to refinance – or should you hold out for them to decline a little more?

Individual circumstances vary, of course. But as a general rule, refinance when it makes financial sense rather than trying to hit the lows, mortgage experts say.

"Waiting for lower rates is like gambling," says Polyana da Costa, mortgage reporter for Bankrate.com, a financial-rate information website. "And in this case, it's probably not worth the risk. Rates usually fall slowly but they shoot up fast."

With fixed mortgage rates dipping below 4 percent for a 30-year loan, the math of refinancing is becoming compelling for many homeowners. Refinancings surged 11.2 percent last week, according to the Mortgage Bankers Association.

To figure out whether refinancing makes sense for you, figure out what it will cost. All those fees, appraisals, title insurance, and so on really add up. Ask your lender for an estimate of what those costs will be – or use calculations from the website of a national lender like Citizens Bank (under "Determine my rate," click "Mortgage."). Make sure to add in any mortgage points the lender charges.

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