Mortgage rates have never been lower. That’s the upshot from Freddie Mac’s weekly Primary Mortgage Market Survey. As of October 22, 2020, Freddie Mac reported that rates on a 30-year fixed-rate mortgage (FRM) had dropped to 2.8%. The rate on a 15-year mortgage declined to 2.33%. Both had additional fees and mortgage points totaling 0.6% of the mortgage amount.
A 5/1 adjustable-rate mortgage (ARM) often has an initial interest rate that’s lower than a fixed-rate mortgage. Freddie Mac, however, reported that a 5/1 ARM had a higher rate of 2.87%. Its fees and mortgage points were a bit lower at 0.3%.
As the chart above reflects, mortgage rates have come down significantly over the past year. A 30-year fixed-rate mortgage a year ago charged interest of about 3.7%, nearly 1.5% higher than today’s rates. On a $300,000 mortgage, today’s lower rate translates into a savings of about $225 a month, before factoring in taxes.