(StatePoint) If you’re in the market to buy a home, today’s historically low average mortgage rates are something to celebrate. Mortgage rates play a significant role in how much home you can afford — and when rates are low, a home that was once unaffordable may now be within reach.
Mortgage rates change frequently, and over the last 45 years they have ranged from a high of 18.63 percent in 1981, to a low of 3.31 percent in 2012. Experts say today’s figures are not anything to take for granted.
“While it’s not likely that the average 30-year fixed mortgage rate will return to its all-time record low, today’s average rates are still very low compared to almost any year since 1971 — all to a buyer’s advantage,” says Sean Becketti, chief economist, Freddie Mac.
At an average of 3.58 percent as of April 2016, today’s rates are “not to be missed for those ready to make the major investment of a home purchase,” says Becketti. “Small changes in mortgage rates can have a significant impact on monthly payments.”
For example, a $200,000 loan financed at 8.86 percent in the 1970s translated to an approximate monthly payment of $1,589. In the 2000s, the average rate of 6.29 percent meant an approximate payment of $1,237. Today, that same monthly payment would only be $908. Experts say for this reason, now is a great time to buy.
Beyond mortgage rates, there are other important aspects to understand before buying a home, such as getting a firm handle on your finances, knowing your credit score, and understanding your down payment options. For more information and tools on buying a home and homeownership, visit myhome.freddiemac.com.
To make your dream of homeownership a reality, consider getting serious about your search. Locking in a great fixed mortgage rate can save you money for years to come.