Mortgage Rates Hit A New All Time Low (for The Fourth Time This Month)

By Dane Smith

The 30 year rate fell from 4.49 to 4.44 this week. This is the 4th week in a row where rates have fallen. What's interesting is not only is 4.44 an all time low. But we have been hitting new all time lows for the last 4 weeks in a row. What is even more interesting is no one cares. The market is barely reacting to bizarrely low interest rates. It's likewise gotten very small play in the press which could just be a contributing factor.

The 15 year dropped from 3.95 to 3.92. The 5 and 1 year arms dropped from 3.63 to 3.56 (5 year arm) and 3.55 to 3.53 (1 year arm). These are all new all time low rates in addition. Below are rates from the weeks from Jul 15, 2010 to Aug 12, 2010

Aug 12, 2010
30-limited 4.44 15-limited 3.92 5 ARM 3.56 1 ARM 3.53

Aug 05, 2010
30-limited 4.49 15-limited 3.95 5 ARM 3.63 1 ARM 3.55

Jul 29, 2010
30-limited 4.54 15-limited 4.00 5 ARM 3.76 1 ARM 3.64

Jul 22, 2010
30-limited 4.56 15-limited 4.03 5 ARM 3.79 1 ARM 3.70

Jul 15, 2010
30-limited 4.57 15-limited 4.06 5 ARM 3.85 1 ARM 3.74

Jan 28, 2010
30-limited 4.98 15-limited 4.39 5 ARM 4.25 1 ARM 4.29

So mortgage rates are one thing but what in truth matters is mortgage payments so lets consider that. We took today's rates and translated them into a mortgage for a 200k house. We did the same thing with rates from July, 29 2010 and rates from January, 28 2010.

Aug 12
30-year $1006.25
15-year $1471.37
5-year ARM $904.8
1-year ARM $901.44

Jul 29
30-year $1018.12
15-year $1479.37
5-year ARM $927.36
1-year ARM $913.79

Jan 28
30-year $1071.19
15-year $1518.76
5-year ARM $983.87
1-year ARM $988.56

For a 200k loan the on a monthly basis payment is somewhat above a thousand dollars at $1006.25. Which is alike to the "low low rates" that we saw on balloons which got the country into the mess we are presently into. Of course the current mortgages don't have sudden balloons or repayment penalties. The trick now is that the mortgages are much tougher to qualify for. Compared to 6 months ago a mortgage payment today on a 200k loan is $64.94 fewer a month for a drop of 6.06 percent.

So what’s going to take place moving forward? It's hard to tell in the short term. The federal government is aim on holding rates as low as possible as long as individuals are concerned when it comes to a double dip recession. Over the following few weeks I would be amazed to see rates rise. After that there are two possiblenesses. If we move into a double dip recession I would suppose rates to remain at current levels. If the economy recovers its likely rates will increase perchance drastically.

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About The Author
Ki's Austin Texas real estate business is easily accessible in Central Austin and the web. He designed a website, which includes a free search for Austin Texas real estate. His site also has several mortgage rate widgets and information on historical interest rates.