Average U.S. rates on 30-year and 15-year fixed mortgages dropped to record lows again this week, with the 15-year loan dipping below 3 percent for the first time ever.
The average rate on the 30-year loan fell to 3.75 percent. That’s down from3.78 percent last week and the lowest since long-term mortgages began in the 1950s.
The 15-year mortgage rate is down to 2.97 percent this week from 3.04 percent last week. The 15-year loan is often used for refinancing, that is if you can get the bank to call you back and then meet the requirements.
A drop in rates could also provide some help to the economy if more people refinance. When people refinance at lower rates, they pay less interest on their loans and have more money to spend.
At the rates quoted this week by Freddie Mac, the monthly principal and interest payment on a 30-year fixed loan of $315,000 would be $1458.81, compared to $2,170.79 for a 15-year loan.
During the housing boom, few refinancers even considered shorter-term mortgages, which made up just 10 percent of all refis in 2006. To the regret of many, they instead extracted as much bubble-era equity as they could by taking on larger mortgages with long repayment times, and often with risky characteristics.
The continued slide in mortgage rates is, in part, due to ongoing economic turmoil in Europe, according to Freddie Mac's chief economist, Frank Nothaft.
"Market concerns over tensions in the Eurozone led to a decline in long-term Treasury bond yields helping to bring fixed mortgage rates to new record lows this week," he said.