If you were waiting for mortgage rates to drop below 4% and you did not lock in a rate last Friday, October 8th, you missed out on a historical first. Rates this morning are back to 4.25% for a 30-year fixed loan. If you can afford a 15-year mortgage you are still in luck, as rates are at 3.625%.
What would be the difference in a 30-year payment and a 15-year payment? Let’s look at an example of both types of fixed-rate loans.
The home you want to buy is $350,000. You have a 20% down payment. For a 30-year fixed, P&I (Principal and Interest) would be $1377.43 per month. For a 15-year fixed you would have a payment of $2,018.90 per month. The biggest difference between a 15 -year fixed and a 30-year fixed is the amount of interest you pay over the life of the loan. Speak to your loan professional to see how much you can save with a 15-year fixed.