Mortgage Rates Dip, Offering Homeowners Potential Savings
Recent action by the Federal Reserve has led to a decrease in mortgage rates, presenting opportunities for both new homebuyers and existing homeowners to refinance.For a $350,000 mortgage, current rates translate to varying monthly payments depending on the loan term.
As of today, a 15-year refinance at 5.98% results in monthly principal and interest payments of $2,949.72. While a higher monthly commitment than a 30-year loan, this option allows borrowers to eliminate their mortgage debt in half the time and save substantially on total interest paid over the life of the loan.
Alternatively, a 30-year refinance at 6.67% carries a monthly principal and interest payment of $2,251.51. This option is particularly attractive to homeowners with existing rates above 7%, offering a chance to benefit from the current market.
Experts suggest considering a refinance when a rate reduction of at least half a percentage point is achievable, though individual circumstances and closing costs should be factored into the decision. The recent Fed rate cut has lowered 30-year rates to their lowest point in nearly a year,resulting in roughly $210 in monthly savings compared to earlier this year’s rates,alongside substantial long-term interest savings for a $350,000 mortgage.
angelica leicht, senior editor for the Managing Your Money section at CBSNews.com, recommends comparing offers from multiple lenders and obtaining preapproval when applicable. She cautions against assuming rates will continue to fall.
