Interest Rates are Down...Again! What exactly does this mean for you?
Mortgage interest rates continue to drop, and are down another 0.07% from last week. At the current average rate, you’ll pay $414 per month in principal and interest for every $100,000 you borrow.
Rates from Federal Reserve Bank of St. Louis
Average Rate Today based on rates from September 14, 2020
How Much House You Can Afford Based on Monthly Payment and Mortgage Interest Rate
Why are rates down?
The Federal Reserve is the nation’s central bank. It guides the economy with the goals of encouraging job growth and keeping inflation under control. The Federal Reserve has taken several steps to protect the economy from more damage from the COVID-19 pandemic. The result has been lower interest rates on mortgages and home equity lines of credit.
The Fed has issued two emergency rate cuts since the beginning of the pandemic. The central bank says it won't raise the rate "until it is confident that the economy has weathered recent events."
In addition, since the start of the pandemic, the Fed has bought billions of dollars of mortgage-backed securities, which has injected money into the mortgage financing system, resulting in a drop in interest rates.
How are Mortgage Rates Determined?
Factors in your Control:
♦ Credit Score
♦ Loan-to-Value Ratio: How much you are borrowing vs how much the property is worth
♦ Debt-to-Income Ratio: How much debt you owe each month vs how much you earn
♦ Lender: Mortgage rates vary from lender to lender
Factors Beyond your Control:
♦ Overall Economy
♦ Inflation
♦ Job Growth
♦ Federal Reserve
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