Mortgage Interest Rate
A mortgage interest rate is an additional charge that is assessed to each and every mortgage payment that you make. In the case of a fixed rate mortgage, you are contracted to a fixed interest rate throughout the entirety of your loan term. In the case of an adjustable rate mortgage, you are faced with an interest rate adjustment period every 6 months during which your contracted interest rate can fluctuate up or down dependent on the overall state of the market.
For example, lets say that you have a fixed mortgage with an interest rate of 6.5%, and you have a required monthly payment of $1,700. The interest rate is applied to the payment, adding an additional charge of $110.50. It is in this way that your mortgage lender makes their profit.
The charts below show the national monthly averages for standard fixed and adjustable rate mortgage plans for both 2004 and 1999 respectively. The numbers help to illustrate the fact that mortgage interest rates have been steadily decreasing for the last 5 years.
National Averages for 2004
| Date |
30-YR Fixed Rate |
1-YR Adjustable Rate |
| Jan-04 |
5.88% |
3.83% |
| Feb-04 |
5.76% |
3.72% |
| Mar-04 |
5.59% |
3.56% |
| Apr-04 |
5.96% |
3.77% |
| May-04 |
6.40% |
4.09% |
| Jun-04 |
6.42% |
4.25% |
| Jul-04 |
6.20% |
4.22% |
(Source: HSH Associates, www.HSH.com)
National Averages for 1999
| Date |
30-YR Fixed Rate
|
1-YR Adjustable Rate
|
| Jan-99 |
6.90% |
5.73% |
| Feb-99 |
6.93% |
5.72% |
| Mar-99 |
7.11% |
5.79% |
| Apr-99 |
7.01% |
5.77% |
| May-99 |
7.23% |
5.83% |
| Jun-99 |
7.67% |
6.02% |
| Jul-99 |
7.74% |
6.11% |
| Aug-99 |
8.08% |
6.32% |
| Sep-99 |
8.01% |
6.41% |
| Oct-99 |
7.98% |
6.40% |
| Nov-99 |
7.86% |
6.43% |
| Dec-99 |
8.04% |
6.51% |
(Source: HSH Associates, www.HSH.com)
Learn how fluctuating interest rates could warrant a time to ( REFINANCE )
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