Mortgage interest rates for a fixed 30 year mortgage rose to 6.31% this week; rates have not been this high since June of 2004. Averages for 15 year fixed interest rate mortgages are also up, averaging 5.85% this week. The fifteen year fixed interest rate was 5.69% last week and 5.08% this time last year.
This increase in mortgage interest rates has not cooled the red-hot housing market. Home sales dropped in September from a record pace; however, these sales are still setting historic records. Construction of new homes is still at record levels in spite of the rate hikes. One year adjustable rate mortgages (ARM) are 5.31% this week; this is up from 4.91% the week before. At this time last year the one year ARM was 4.0%.
Everyone likes to save money on their mortgage loan. Interest rates have been going up but are still at historic lows. If refinancing is not an option for you, there are other steps you can take to save money on your mortgage. Consider adjusting the frequency of your mortgage payments. Traditional mortgages have fixed payments once a month; if you make weekly or bi-weekly payments instead of once per month you will save yourself thousands of dollars in interest over the term of the loan. A simple Mortgage Calculator can demonstrate the principle of bi-weekly mortgage payments.
Purchasing a home is the largest investment many people make; owning your home outright provides you financial stability and well-being. Purchasing your home was a big investment. Take steps to maximize the return on your investment. There are many ways to save money when it comes to your mortgage, refinancing is only one of them. Educating yourself on these options will save you thousands of dollars over the life of your mortgage.