Mortgage Rates Fall Again

Cheap mortgage rates are a bonanza for home buyers.

Currently, home mortgage rates are trending lower which is good news for home buyers.  According to a recent Freddie Mac survey, the 30-year fixed rate is 4.28 percent.  The 15-year fixed rate is 3.32 percent.

So how important is a lower home mortgage rate for a home buyer? 

  • At a rate of 6 percent, the monthly mortgage payment for a $200,000 thirty-year mortgage is $1,000 a month ($200,000 x 6% ÷ 12 = $1,000). 
  • If the rate drops to 4.28 percent, the monthly payment drops to $713 a month ($200,000 x 4.28% ÷ 12 = $713). 
  • That’s a difference of $287 each and every month.
  • Assuming the home buyer makes monthly payments for the entire 30-year period, that’s a savings of $103,320 ($287 x 12 x 30 = $103,320).

For additional information about mortgage rates and the factors that cause rates to increase or decrease go to

Discussion Questions

1.  What are the common mistakes people make when they finance a home?

2.  Why would you consider a 15-year mortgage instead of a 30-year mortgage?

3.  Why would you consider a 30-year mortgage instead of a 15-year mortgage?

Teaching Suggestions

You may want to use the information in this blog post and the original article to discuss

  • Why a home buyer should compare mortgage rates when financing a home purchase.
  • The advantages and disadvantages of a 30-year and a 15-year home mortgage.
Categories: Chapter 7, Financing a Home | Tags: | Leave a comment

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