We saw mortgage interest rates drop again in the last 30 days. The recent change will save new borrowers another $3 per month for every $100,000 borrowed. Average U.S. rates for 30-year fixed rate mortgages were at 2.87% as of this week. Last month at this time, they were sitting at 2.93%. Of course, both are historically low.
Recent forecasts for changes in interest rates have generally been flat to downward. While there will likely be downward pressure, it is hard to imagine them settling too much lower since we are already in record low territory. Regardless of any movement we see, we will continue to be considerably lower than the long-term average mortgage interest rates in our country.
While it is hard to believe in today’s environment, the long-term average is still almost 8%. When you compare monthly payments at today’s rates versus the long-term average, homeowners are currently saving about $313 per month per $100,000 borrowed. That makes mortgaging today’s homes considerably more affordable than historic averages.
Mortgages are also significantly less expensive now than they were last year at this time. The average decrease in monthly payments per $100,000 borrowed with a 30-year fixed price mortgage is around $50 per month over the last year. If you max out a conventional mortgage, that means your monthly payment will be around $256 less per month now than it would have been in October of 2019.