If you’re considering buying or refinancing your home, then a 30-year fixed loan may be the right option for you. A fixed-rate mortgage offers predictable monthly payments. Your monthly payment, both principal and interest, will remain the same for the entire loan term. This predictability makes it easier for homeowners to create a budget. For those that prefer stability, the 30-year fixed mortgage may be the right fit.
Currently the average interest rate on 30-year mortgages rose to 3.8%, the highest level for the year. A 30-year fixed rate mortgage is advantageous if you foresee interest rates increasing or if you plan to remain in your home for several years. The 30-year fixed mortgage is one of the most popular of mortgages. The term of the loan is longer than other options such as the 15-year and 20-year mortgage, so more interest is paid over the life of the loan. Borrowers who choose the 30-year fixed rate mortgage are given a payment table at settlement, which shows them the payments they will make each month for the life of their loan.
Most significantly, the 30-year fixed mortgage allows certainty of payments each month allowing homeowners to budget easily. Additionally the 30 years keeps payments lower than a shorter-term loan, making the 30-year more affordable. Because the 30-year fixed mortgage is more affordable and predictable, homeowners have the ability to put more money down upfront toward their mortgage. If you’re looking for predictable payments and you’re confident you will be in your home for an extended period of time, then search for the best mortgage rate on a 30-year fixed mortgage.
One disadvantage to the 30-year mortgage is that when interest rates decrease in the market, homeowners are unable to take advantage of reduced mortgage rates without refinancing into a new loan. Refinancing, although advantageous, sometimes can be costly. Also, the 30-year fixed mortgage typically has slightly higher interest rates than other loans with shorter-terms or adjustable rate loans. With a 30-year fixed mortgage, a larger portion of the payment is put toward interest. As the loan is repaid, then a percentage goes toward interest. Thus, a setback to the 30-year mortgage is that in the beginning years of a mortgage homeowners are not building equity in their home.
Best Mortgage Rates
It is important as home buyer to weigh the advantages and disadvantages and determine whether the 30-year fixed rate mortgage is a good fit for you. If you are in the market to purchase a home, finding the right home and the right mortgage are of top priority. Part of finding the right mortgage is securing a good lender and the best mortgage rate. Best Mortgage Rates assists those looking to purchase a home by allowing you to compare mortgage rates across the country. You can access available 30-year fixed mortgage rates on our easy online tool. Our helpful system makes it easy for home buyers to compare mortgage rates. To learn more about the 30-year fixed mortgage rate, research the various rates available from hundreds of lenders across the country using our website today!