According to a weekly report from Freddie Mac, this week the mortgage rate for a 15 year fixed-rate mortgage hit an all-time low of 2.61%, down from 2.64%. This new low beat out the previous record of 2.63% recorded in November of 2012. Also hitting record lows this week was the adjustable-rate mortgage (ARM) 5/1 with a rate of 2.5%.
This new rate for the 15 year mortgage means homeowners could potentially save substantial amounts through refinancing their current 30 year fixed rates. Those who have a 5% 30 year fixed loan and switch to a 2.6% 15 year loan would only pay $21,000 in interest for every $100,00 borrowed instead of the $93,000 interest on a 30 year fixed mortgage.
Although the 15 year fixed has hit record lows, the 30 year fixed-rate has actually risen slightly by 0.09% above its record low, coming in at 3.4%. Roughly 75% of last week’s loan applications were for refinancing.