The 30-year fell to 3.31% from 3.34% last week, according to Freddie Mac (FMCC, Fortune 500), the government controlled mortgage backer. The 15-year rate averaged 2.63%, compared with 2.65% a week ago.
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"If you're looking for Black Friday deals and door-busters, it's pretty hard to beat the savings," he said. "To really rack up savings, you might also consider a purchase or refinance using a loan with a term shorter than the traditional 30 years."
The numbers add up like this: Homeowners current paying off 30-year loans with rates of 4% spend about $1,098 a month in mortgage payments on a $200,000 balance, paying a total interest cost of $143,739.
Refinancing at 2.63% for 15 years would cost them about $250 a month more, but they would wind up paying just $42,250 in total interest and their payments would end years earlier.
Refinancing into another 30-year loan at 3.31% would cost homeowners only $877 a month, saving $221 from the existing loan. But the total interest paid would come to $115,725 over the life of the loan, a difference of more than $73,000 compared with the 15-year mortgage.
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Low interest rates are very helpful to the housing market by slashing the monthly costs of ownership, which homebuyers often focus on when calculating if they can afford to buy a home. With home prices also down about 30% from their recent peak, according to the S&P/Case-Shiller home price index, and employment numbers gradually improving, affording a home has rarely been easier.
The report adds to other recent good news for housing markets, with existing home sales, prices and new construction all recording upticks.
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