According to Freddie Mac’s weekly mortgage rate survey, 30 year fixed rates have fallen below 4.00%, matching levels last seen in June of 2013. The average rate according to the survey dropped to 3.97% from 4.12% a week earlier. One month ago, the rate was just over one-quarter of a percent higher at 4.23%.
For those who regularly read these posts, you recall that while rate moves are important what’s even more important is how the rate translates into a monthly payment. Yet in the same manner a loaf of bread that costs $2.99 seems much lower than $3.00 so too can interest rates at 3.97% have more of a psychological effect.
For example, a 30 year loan of $150,000 at 4.00% provides a $954 principal and interest payment but a rate of 3.95% gives a $949 amount for a difference of five bucks. But the rate being in the “threes” it just sounds much lower. What does all this mean for veterans?
If rates continue to move further it’s because there are a lot of bad things going on in the economy and while some can cheer for lower rates let’s don’t forget that rates going any lower means things are getting worse. If you’re refinancing or have a VA loan in process, it’s probably a good time to lock in. Rates might go lower, but prudence suggests taking what’s there.