I just saw the first crack in rate late today - a whisper/unadvertised special 5 yr for insured purchases at 4.89% and 5.04% for 3 yr insured. I'm not going to include that in our reference rates below because this lender has unique policies and is well known for selectively undercutting rates and overwhelming their staff to the point that files can take 10-15 business days to be reviewed and underwritten. But maybe, just maybe, we'll see another lender step up and try and 'buy' some more volume.
If we compare a 5 yr at 4.99 and a 3 yr at 5.14 and assume that rates are 0.75% lower in 3 years, the weighted average is 4.75% over 5 years. If we only get a 0.5% drop over the next 3 years, that is now 4.85%. In both cases, we are very close to a 5 yr special currently offered - and if you have the option to renew early on a blend with little more than a phone call, the 5 yr starts to look very attractive!
For properties priced below $1 million, with less than 20% down payment, example rates would be:
- 1 yr fixed 6.64% or $6.78 per $1k in mortgage
- 3 yr fixed 5.14% or $5.90 per $1k in mortgage
- 5 yr fixed 4.99% or $5.81 per $1k in mortgage
For clarity, a $500,000 at 5.09% on a 25 yr amortization would have payments of 500 x 5.87 = $2,935 monthly.
Note also that rates can change daily, certainly differ between lenders and definitely differ based on down payment, mortgage features and hidden costs.
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