December 3rd, 2009 by Michael Oliver

Share This Post

Mortgage rates have just recorded the lowest rates in decades shattering the record lows set in April of 2009. Interest rates right now are literally the absolute cheapest they have been in decades. Currently interest rates on U.S. 30-year fixed-rate mortgages, the most widely used loan, fell for a fifth consecutive week, averaging 4.71 percent for the week ending Dec. 3, down from the previous week’s 4.78 percent, according to a survey released on Thursday by home funding company Freddie Mac.

Freddie Mac, the second-largest U.S. mortgage finance company, started the survey in 1971.

With mortgage rates this low affordability is extremely high. In Tucson many buyers can buy a home for a couple hundred dollars less a month than they could rent an apartment of the same size and proximity to homes available for sale. Along with the steep decline in Tucson home prices of 40% or more from the top interest rates are at least 1.25% cheaper than a couple years ago.  1.25 Percent may seem like a very trivial stat however look at the numbers and see the difference in a 6% mortgage and a 4.71% mortgage rate.

$300,000 loan amount 30 year fixed (Only principal and interest as taxes and insurance is variable depending upon your location and other possibilities.)

At 6% the payment on a $300,000 mortgage equals; $1,798.65/ month

At 4.71% (today’s average rate) the same $300,000 mortgage payment equals; $1,557.17/ month

That makes for a savings of $241.80/ month for 30 years OR about $86,932.80 and of course that doesn’t count the future earnings of that $86,932.80 that if you just received a nominal rate of return would easily push the total additional money you saved in the mid $100k range. Hopefully that makes the case for just how cheap money is right now.

mortgage rates, tucson home interest rates, tucson mortgage rates