The Average House Loan Interest Rate
When mortgage interest rates are historically low, as in 2011, borrowers have an additional incentive to purchase because the low interest rate can help them afford a larger home. In addition, current home owners can take advantage of low interest rates to refinance their existing mortgages. Interest rates vary from the average depending on the region of the country and the borrower's creditworthiness.
Other People Are Reading
-
30-year Fixed-rate Mortgage
-
The average interest rate for a 30-year fixed-rate mortgage is 5.04 percent, as of March 2011. For a jumbo mortgage, which is generally a mortgage of more than $417,000, the interest rate is slightly higher, at 5.58 percent. The 30-year fixed-rate mortgage is one of the most popular types of mortgages because its long repayment period keeps monthly payments low and borrowers can lock in their interest rates to guarantee the same monthly payment for the duration of the loan.
15-year Fixed-rate Mortgage
-
The interest rate on a 15-year fixed-rate mortgage is lower than that of the 30-year mortgage. As of March 2011, the national average 15-year mortgage rate is 4.32 percent. The lower interest rate and shorter repayment period add up to significant savings for people who opt to repay over 15 years instead of 30. For example, when borrowing $200,000, the monthly payment on the 15-year mortgage is only $433.11 higher than on a 30-year mortgage. However, the 15-year mortgage costs $116,176 less in total interest to repay.
-
Five- or 30-year Adjustable-rate Mortgages
-
An adjustable-rate mortgage typically has a fixed rate for the first few years of the mortgage and then the rate adjusts every year after that based on market conditions or the economic index. For example, the interest rate for a five-year adjustable, or a 5/1 arm -- for the first five years is fixed then becomes an adjustable rate beginning on the sixth year. The mortgage rate on a 5/1 is only 3.88 percent, as of March 2011. However, this rate can climb significantly after the first five years are over. People who plan to move within five years could benefit greatly from the low starting rate, though.
Home Equity Loans
-
Home owners looking to borrow money with a home equity loan or home equity line of credit face slightly higher interest rates. This is because the home equity borrowing is subordinate to the primary mortgage, so the lender takes on more risk. The interest rate for a fixed-rate home equity loan has a national average of 7.04 percent, as of March 2011. In contrast, the variable interest rate for a home equity line of credit is only 5.54 percent.
-
