A lesson on the current interest rates and how it may affect you

LET'S TALK INTEREST RATES! 📈🧐 

How do the rate fluctuations affect buying or refinancing a home? 🏠

Despite recent hikes, today's 30 year mortgage is still below average from a historical perspective. ⏱

The main industry source for mortgage rates between April 1971 and October 2022. The 30 year fixed average is just under 8%. 

  • In 1981, mortgage rates were 16.63%

  • In 2000, mortgage rates were 8.0%

  • In 2008, mortgage rates were 6.3%

  • In 2016, mortgage rates were 3.65%

  • In 2022, mortgage rates are around 7% 

How historical mortgage rates affect buying

When mortgage rates are lower, buying a home is more affordable. A lower payment may also help you qualify for a more expensive home. When rates are higher, an ARM may give you temporary payment relief if you plan to sell or refinance before the rate adjusts.

How historical mortgage rates affect refinancing

A refinance replaces your current loan with a new loan, typically at a lower rate. When mortgage interest rates slide, refinancing becomes more attractive to homeowners. The extra monthly savings could give you wiggle room in your budget to pay down other debt or boost your savings. If the equity in your home has grown, you can tap it with a cash-out refinance. With this type of refinance, you’ll take on a loan for more than you owe. You can use the extra funds as cash to make home improvements or consolidate debt. Lower rates may help minimize the larger monthly payment.

 

If you have any real estate questions, feel free to call me at (718) 767-8200. I would love to hear from you.