What is your mortgage interest rate?

[crunchy_mommy]

Just curious what rate most of us are paying on our mortgages...

And I keep looking at refinance interest rates of 2.5% and feel like there MUST be a catch, so wondering how many people actually have rates that low... We called our current lender (which is a state first-time homebuyer program) and their refinance rates are 5.5, which is the same as our current rate, I'd think they'd off the lowest rates...

[taubel]

We are at 5.25. We could refinance and go lower, but hesitate because we want to move and don't want to waste money on closing costs (unless it's for another house). 

[MonarchMom]

Keep in mind that if you are planning to stay put and pay off your mortgage then you can lower your rate simply by pre-paying.  By making modest additional payments every month that go directly to principal you can take years off the length of the mortgage and pay much less interest over the life of the loan.    Since the principal is reduced sooner, each month's payment contains more principal and less interest. This reduces the effective interest rate.

The upside to this method - no paperwork, no closing costs, you are not starting out by paying mostly interest as you do on a new loan, and you can cut back on the extra payment at any time if needed.

[laohaire]

We are paying 5.625% for a mortgage taken out 8 years ago. I too have been eyeing the lower rates and wondering about refi. I've crunched the numbers and it makes sense to do it. And yet, I simply don't want to. DH and I have decided to just go crazy paying off the mortgage. I think it might actually save us money even so, to refi, over the time it will take us to pay it off but I just. Don't. Want. To. (and can't fully justify why not).

[TiredX2]

We are paying 4.875% from when we refinanced in 2003.  I know there have been lower rates for quite some time, but I am (irrationally) opposed to paying for another assessment.  Since you already have gone through the mortgage process, you know what to look for--- points paid, if the rate is fixed, prepayment penalties, etc...  Good luck--- sounds like a great deal!

 

Originally Posted by MonarchMom 

Keep in mind that if you are planning to stay put and pay off your mortgage then you can lower your rate simply by pre-paying.  By making modest additional payments every month that go directly to principal you can take years off the length of the mortgage and pay much less interest over the life of the loan.    Since the principal is reduced sooner, each month's payment contains more principal and less interest. This reduces the effective interest rate.

To be clear, this doesn't actually lower your interest rate you are simply paying the same rate on smaller amount of money.  You end up paying less in interest but that is because you have borrowed the money for a shorter amount of time, not because you are paying at a lower rate.

[crunchy_mommy]

Originally Posted by MonarchMom 

Keep in mind that if you are planning to stay put and pay off your mortgage then you can lower your rate simply by pre-paying.  By making modest additional payments every month that go directly to principal you can take years off the length of the mortgage and pay much less interest over the life of the loan.    Since the principal is reduced sooner, each month's payment contains more principal and less interest. This reduces the effective interest rate.

The upside to this method - no paperwork, no closing costs, you are not starting out by paying mostly interest as you do on a new loan, and you can cut back on the extra payment at any time if needed.

This is what we are currently doing... but I still can't help but think, what if I could get that 3% rate I see advertised? Then we'd save even more (& could still continue to pre-pay). But I do feel like the mortgage we have now gives us a lot of security because it's an organization that actually wants to keep people in their homes. They offer free programs like deferring a portion of your mortgage payment during the winter so you can pay for heat. We've never taken advantage of those things but it is nice to know they are there & the company is likely to work with us if we ever had trouble paying... I don't even know if we COULD refinance because local home values have sunk so much so ours might appraise for less than we owe. But I guess I'm just curious whether those low rates are too good to be true.

[MariaMadly]

6.42% on a 30-year here (ouch!) -- we starting building our home in 2003 and moved in early half of 2004.  We're in the middle of looking at refi.  DH was on our bank's site and saw under 2% 15-year fixed rate mortgage, with closing costs in the thousands.  We also have more than half the appraised value of our home in equity.  I was actually planning to call them to get more details tomorrow.  We're already pre-paying around $300 / month now and are wondering about the same trade-off.

[sere234]

Ours is 4.25% on a 20 loan with 19 years left

[A&A]

Anything lower than 3.4% is going to be a variable (not fixed) rate.  

[sunflower.mama]

Why not do a no closing costs loan?  We have done several and they are no more complicated than a regular refi.  You will pay a slightly higher interest rate - think 1/8 of a point - so 4.625 instead of 4.5 - and you pay zero in closing costs.  The lender or broker pays, and they get paid by your slightly higher rate.  You will have to fund your escrows - which means you prepay taxes and about 1/2 month of interest, but once you close you skip one mortgage payment and get refunded your escrow from your old lender, so as long as you have the liquid $$ to do this, you are not out of pocket any $$.  We haven't even had to pay our appraisal costs.  As I said, we've done it several times.  Once in the 5s, once in the 4s, and once in the 3s.  You don't have to worry about capturing the absolute lowest rate because you are not investing closing costs in the new rate...so if rates drop, you can do another refi in 6 months or a year.  Most mortgage brokers will offer a no cost loan.  I think people don't really know about them. 

[Poddi]

Ours was 5.5%.  It wasn't great and we wanted to refinance when the rates got lower.  Then we found out that we had one of the highest possible penalty that's still legal associated with it.  If we refinanced we wouldn't have saved any money, especially since there's not much time left in that term.  So we'll keep it at the rate until the term is over.  (In Canada mortgages are usually 25 years with interests signed for 4 or 5 years at a time, renewed a few times.)  My dad just got a new mortgage for 2.99.  Though I think that was some limited time offer.

[SageR]

We just refinanced for 3.8%  fixed for 20 years, with no escrow and closing costs bundled in, through our local bank.  It is saving us a lot of money and 2 years of payments.  We have a pretty small income so it is a life changing amount for us, actually.  Interest rates are the lowest they have been in decades right now so maybe that is why you are hearing about people with crazy rates?  TBH though, I don't know anyone else with a rate like ours, at least not yet.   Anyway, for anyone thinking about it at least crunch the numbers.  It has been a very simple process for us, we've probably spent an hour total on it, all we have left to do is close.

[JoyFilled]

Our is 0.7 below prime with firstline mortgages.  I voted below 2.0% but I looked at prime and it is 3.0 today so we are actually at 2.3 so I voted wrong.  I am also in Canada.  

[ASusan]

Ours is somewhere between 3.5-4% on a 15-year. We refinanced in 2010 from a 30-year to get that. I wish we had not. The increased amount of the payment is just a little too tight to be comfortable. I wish we had stuck with our 30-year (which was still between 4-5%) and just make extra payments as we could afford. We are house-rich and cash-poor right now.

[MariaMadly]

OK, locked in our application at just under 3.3% 15-year fixed.  Closing costs incorporated in the loan, we bring under $100 to the big event. 

If this goes through, our monthly payments stay the same but we pay off the loan six years sooner.

Conditionally approved, so stay tuned.

[youngspiritmom]

Now is a really good time to refinance.

[crunchy_mommy]

OK so question for those who did refinance -- did you have to get an appraisal?

The town has valued our property at $80K below what we bought it for. However, that's just based on current home values in our area, they haven't set foot inside our house. We've done a major remodel, virtually every room in the house was redone, though the bedroom is still a little unfinished. We put in a driveway, too. The kitchen remodel was BIG and makes the house seem much better. So I'm guessing we'd appraise at least a little higher than what the town has us valued at... but I doubt we'd get all the way up to the amount we owe, since local housing values have sunk so much. And I don't believe we're eligible for HARP. So how do we do this? Is there a way around the appraisal, any lenders that don't require it? I'd hate to spend time & MONEY on this process and not be able to do it in the end... but I want the lower interest rates too!!!

[MariaMadly]

Originally Posted by crunchy_mommy 

OK so question for those who did refinance -- did you have to get an appraisal?
The town has valued our property at $80K below what we bought it for. However, that's just based on current home values in our area, they haven't set foot inside our house. We've done a major remodel, virtually every room in the house was redone, though the bedroom is still a little unfinished. We put in a driveway, too. The kitchen remodel was BIG and makes the house seem much better. So I'm guessing we'd appraise at least a little higher than what the town has us valued at... but I doubt we'd get all the way up to the amount we owe, since local housing values have sunk so much. And I don't believe we're eligible for HARP. So how do we do this? Is there a way around the appraisal, any lenders that don't require it? I'd hate to spend time & MONEY on this process and not be able to do it in the end... but I want the lower interest rates too!!!

Ours is requiring an appraisal (like a physical, come through the house appraiser type).  This even though we have both the original loan (<10 years old) and home equity line of credit (<5 years ago), both with full appraisals, through the same bank.

I hear you about falling home values:  our cost of construction in 2003-04 came to $399,000, and the city currently has us appraised at less than $215,000.  We haven't made any improvements, though.  I hope the work you've done helps you with that!

[A&A]

We have a VA loan so we didn't need an appraisal, but without a VA loan we would have needed one. And yeah, if you're upside down in your house, you probably won't be approved for the refinance. It doesn't make sense but that's typically the way it is.

[SunRise]

My interest rate is 5.1.

I have owned my house for almost three years and have considered re-financing for a 3% rate (@ 15 years). What I have read is one needs a rate that is at least 1.5 - 2% lower then their current rate to make it worth the cost of money you need to pay for re-financing.   I toss around paying approx 3000 for refinancing versus just putting the 3000 on the balance.  So far I have decided to not bother with the hassles, but I AM looking at buying a different home and then selling mine ... so I may get that lower rate afterall.

I also recently read that these rates are supposed to stay low until the end of 2014, so there is no rush.