7 ways to score a low mortgage rate when interest rates are rising
Don’t look now, but mortgage rates are rising, which is typically bad news for prospective homebuyers as it increases both their monthly payments and what they’d expect to pay over the life of their loan.
According to Bankrate, as of Dec. 4, the average 30-year fixed mortgage was 4.13%. Comparatively, a month before, the 30-year mortgage rate averaged just 3.51%, a difference of 62 basis points. If you’re planning to take out a $200,000 loan over 30 years, the total cost of a mortgage at 3.51% would be $323,714 compared to a total cost of $349,157 at 4.13%. That’s more than a $25,000 difference in a matter of a month (or about $71 extra per month), and this estimate doesn’t include the fees and points you might pay to originate your home loan.
With the likelihood increasing that the Federal Reserve will boost interest rates in December and stick with its policy of monetary tightening, at least in the near term, the reality is that mortgage rates could rise even more. This means prospective homebuyers need to be extra diligent in their efforts to secure a low mortgage rate.
Here are seven ways you may be able to snag a low mortgage rate even with interest rates on the rise.