MORTGAGE INTEREST RATES

MORTGAGE INTEREST RATES

Mortgage interest rates are beginning to rise after remaining at historical lows for several years. If you have a high interest rate loan you should consider refinancing it before rates begin to go up.

Although there are typically some costs associated with refinancing, the benefits can significantly outweigh them. For example, a 30 year mortgage loan on $150,000.00 at a fixed rate of 3.5 percent (typical today) will require you to pay $92,484.13 in interest over the life of the loan. That may seem like a lot, but consider that if the loan were at 5.5 percent you would pay an additional $64,121.93 in interest over the life of the loan; and if the interest rate was 7.5 percent you would pay an additional $135,091.70 in interest. Also, mortgage interest is deductible so that there is a tax advantage in paying interest on your home, however that is one of the provisions Congress is considering eliminating in order to balance the budget. It may not be politically possible for Congress to actually do so, but if ever there was a good time to consider locking into a low rate mortgage, it is now