Mortgage Interest Rates Nudge Down A Little
By Dane Smith
Before we talk about what happened with rates this week lets do a quick recap of what happened last week. Last week interest rates made a sudden jump over the previous week. For the entire month of June and July 30 year interest rates only fluctuated from 6.09 to 6.45. Then last week 30 year rates suddenly jumped from 6.26 to 6.63. At the time we predicted that rates would probably fall this week because usually after big spikes in rates there is a bit of a correction. We saw exactly that with all four of the major products falling, but not back to their levels from two weeks ago. 30 Year rates fell from 6.63 to 6.52. The only product to not fall substantially this week was the 1 Year ARM. Last week the 1 Year rate rose from 5.10 to 5.49. This week the 1 Year rate lost most of that gain falling to 5.27. Below are rates for the major products for the last month.


July 31, 2008
30-yr 6.52 15-yr 6.07 5-yr ARM 6.07 1-yr ARM 5.27

July 24, 2008
30-yr 6.63 15-yr 6.18 5-yr ARM 6.16 1-yr ARM 5.49

July 17, 2008
30-yr 6.26 15-yr 5.78 5-yr ARM 5.80 1-yr ARM 5.10

July 10, 2008
30-yr 6.37 15-yr 5.91 5-yr ARM 5.82 1-yr ARM 5.17

July 3, 2008
30-yr 6.35 15-yr 5.92 5-yr ARM 5.78 1-yr ARM 5.17

Ok so interest rates tell part of the story. But how does this translate into a

payment. Using our free calculator lets translate the interest rates over the last few weeks into a payment for a 200k loan.

July 31th, 2008
30-yr $1266.76
15-yr $1695.28
5-yr ARM $1208.11
1-yr ARM $1106.88

July 24th, 2008
30-yr $1281.28
15-yr $1707.22
5-yr ARM $1219.75
1-yr ARM $1134.32

July 17th, 2008
30-yr $1232.73
15-yr $1664.03
5-yr ARM $1173.5
1-yr ARM $1085.89

So it looks like for now rates are still relatively high. The only product that remains relatively low is the 1 year rate. Comparing it to the 30 Year rate at 6.52 the 1 Year rate comes in at 5.27. For a 200k the payment with a 30 Year loan would be 1266.76. For a 1 Year Arm the payment would be 1106.88 or about 12.6% less. While I usually avoid Arm's that is a pretty substantial different. The only problem with 1 Year Arm's is that their is no guarantee rates will be less in one year. And with all the volatility in the markets right now they could be somewhat higher. Looking forward its hard to tell what rates are going to do over the next month. The FED's refusal to lower rates would tend to push interest rates up but since rates rose so much over the last two weeks we can only hope that for the time being banks are satisfied with the current rates.
Ki works in Austin Texas as a realtor. His website provides information on mortgage interest rates along with a free mortgage calculator. Their is also graphs that show historical mortgage interest rates