While it seems that 30-year fixed mortgage rates tend to steal all the headlines, 15-year fixed mortgage rates have quietly reached record lows this week as well, as per housing authority Freddie Mac’s weekly survey.

This morning, Freddie announced that the 30-year fixed fell to a new record low 3.03%, down from 3.07% last week. This is the second consecutive record low for the nation’s most popular loan program, with data going back as far as 1971.

Freddie Mac’s chief economist Sam Khater quickly pointed that out; that he didn’t mention the fact that 15-year fixed mortgage rates had also reached their lowest point on record this week. And that’s a big deal as well because they’ve been tracking 15-year fixed mortgage rates since 1991, meaning they’re at 30-year lows.

  • Mortgage rates on the 15-year fixed fell to 2.51% this week per Freddie Mac
  • Down from an average of 2.56% last week and 3.22% a year ago
  • Previously they were this low during the week ending May 2nd, 2013
  • It really might be worth considering something other than the 30-year fixed mortgage if you’re thinking about refinancing your existing mortgage now.

During the week ending July 9th, 15-year fixed mortgage rates fell to 2.51%, down from 2.56% a week earlier, according to Freddie Mac data. This has marked a new all-time low for the second most popular home loan program out there, which had previously been as low as 2.56% during the week ending May 2nd, 2013.

Cleary, this is the more newsworthy story; because it’s been more than seven years since the 15-year fixed rate mortgages were this bargain basement cheap.

Since the 30-year fixed is much more popular than its 15-year fixed counterpart, it snags about 90% of all purchase mortgages and roughly 75% of all mortgages, including mortgage refinances.

It’s not as dominant for refinances because most savvy homeowners would prefer to avoid resetting the clock, especially if they’ve already paid down their mortgage for several years.

Say for example, if you’re already 10 years into a 30-year fixed, refinancing into a new 30-year fixed rate it means that you’ll pay interest for a total 40 years versus 30 years. The solution would be to refinance into a 15-year fixed and lower your aggregate loan term to 25 years, assuming that it’s affordable on your budget.

Does a 15-Year Fixed Mortgage Make Sense For You Right Now?

You can get a mortgage rate at about .50% cheaper on the 15-year fixed rate loan.
This could result in saving you a significant amount interest and can help pay off your mortgage a lot faster. It might be an excellent option for the homeowner who has already paid down their mortgage for many years.

The main drawback is that the monthly payment is more expensive and with rates so cheap, why would you rush to end that mortgage? Here’s the “rub” – with mortgage rates being so cheap at this moment, you could argue that it’s best to take the longest mortgage loan term available.

After all, with borrowing costs so inexpensive, and maybe you’re earning 1% in a savings account, which really is a losing endeavor compared to the 2.5% to 3% mortgage rate. You can benefit from lower monthly mortgage payments if refinancing for a fixed 15-Year mortgage is the right fit for your financial goals.

Let MortgageDepot educate you on what your options are if you’re considering refinancing your home. Contact us today at MortgageDepot.

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