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30-Year Interest Rates for January 12, 2021 | Rates go up

30-Year Interest Rates for January 12, 2021 | Rates go up

30-year mortgage interest rates

The average rate for a 30-year fixed-rate mortgage is 2.93 percent, up 8 basis points over the previous week. One month ago, the average rate on a 30-year mortgage was lower, at 2.85 percent.

At today’s average interest rate, you’ll pay principal and interest of $417.84 for every $100k you borrow. That’s up $4.28 from last Tuesday. Compared to a month ago, that’s $4.28 higher.

Use Bankrate’s mortgage rate calculator to calculate your monthly payments and see how much you’ll save by adding extra payments. Our tool will also help you calculate how much interest you’ll fork up over the life of your loan.

30-year refinance rates

The average rate to refinance a 30-year fixed-rate mortgage is 2.98 percent, rising 9 basis points compared to a week ago. A month ago, the average rate on a 30-year mortgage was 2.91 percent.

At the current average rate, you’ll pay P&I of $420.53 for every $100k you borrow. Compared to last week, that’s $4.84 higher. Compared to a month ago, that’s $3.76 higher.

Average annual 30 year fixed mortgage rate, 2012-2019

Year Average 30-Year Fixed Annual Rate
2012 3.88%
2013 4.16%
2014 4.31%
2015 3.99%
2016 3.79%
2017 4.14%
2018 4.70%
2019 4.13%

Pros and cons of a 30-year mortgage

The 30-year mortgage is the most popular home loan, and it has a number of advantages. Among them:

  • Lower monthly payment. The 30-year mortgage offers lower, more affordable payments spread over time compared with shorter-term mortgages.
  • Stability. With the 30-year, you lock in a consistent principal and interest payment. That predictability lets you plan your housing expenses for the long term. Keep in mind: Your monthly housing payment can change if your homeowners insurance and property taxes go up or, less likely, down.
  • Buying power. Because you have lower payments, you can qualify for a bigger loan and a more expensive house.
  • Flexibility. Lower monthly payments can free up some of your monthly budget for other goals, like saving for emergencies, retirement, college tuition or home repairs and maintenance.
  • Strategic use of debt. Some argue that Americans focus too much on paying down their mortgages rather than adding to their retirement accounts. A 30-year fixed-rate mortgage with a lower monthly payment can allow you to save more for retirement.

As with any financial product, the 30-year mortgage has some downsides, including:

  • More total interest paid. A 30-year term means you’ll pay more overall in interest compared with what you’d pay with a shorter-term loan.
  • Higher mortgage rates. Lenders charge higher interest rates for 30-year mortgages compared to 15-year loans. That’s because they’re taking on the risk of not being repaid for a longer time span.
  • Slower equity growth. The amortization table for a 30-year mortgage reveals a harsh reality: In the early years, almost all of your payments go to interest rather than principal. A 15-year loan brings a higher monthly payment but much faster retirement of the loan amount.
  • Buying more house than you should. Just because you might be able to afford more house with a 30-year loan doesn’t mean you should stretch your budget to the breaking point. Give yourself some breathing room for other financial goals and unexpected expenses. Use Bankrate’s home affordability calculator to determine how much house you can afford.
  • Searching for the right lender?

    • Chase Home Lending Mortgage Review
    • Navy Federal Credit Union Mortgage Review
    • HomePlus Mortgage Review
    • Methodology

      The rates you see above are Bankrate.com Site Averages. These calculations are run after the close of the previous business day and include rates and/or yields we have collected that day for a specific banking product. Bankrate.com site averages tend to be volatile — they help consumers see the movement of rates day to day. The institutions included in the “Bankrate.com Site Average” tables will be different from one day to the next, depending on which institutions’ rates we gather on a particular day for presentation on the site.

      To learn more about the different rate averages Bankrate publishes, see “Understanding Bankrate’s on-site rate averages”.

Published at Tue, 12 Jan 2021 17:00:36 +0000

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Written by Riel Roussopoulos

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