What is your mortgage rate?

csuave · November 2015

There a little debate on the rent vs buy thread about 30 year vs 15 year mortgage. Made me curious what people are paying for mortgage rates.

We bought new in 2013, 30 year @ 3.5% We could have afforded to do a 15 year but I like the "safety" of the lower payment with 30 years and at 3.5% I felt like we were already getting a low rate.

Now that DH has been unemployed for nearly 2 years I am the only income for our family. The mortgage is about 25% of my salary and I am happy it isn't a higher monthly payment.

dragonstarjk · November 2015

Ours is 3.375% on a 15-year mortgage. It is about 15% of our annual income.

We bought our house in 2006 with a 30-yr ARM at 6.9% (with the rate set to go up significantly after 2 years). We had zero down payment and it was probably about 25% of our income at that time, I can't remember. This was obviously before the housing market collapse and new regulations.

Refinanced in 2008 to a 30-yr fixed at 5%; refinanced again in 2012 when it dropped to 3.375%, and that's also when we switched to a 15-year mortgage.

I know there's a lot of debate about down payment, 15-yr vs. 30-yr, etc. etc. but it really just comes down to making smart decisions, understanding exactly what you are signing, and not getting in over your head. Our original mortgage was one of those that a lot of people got that ended very badly for them, because of the ARM and not having a down payment. But, we knew when we signed the papers that we would have to refinance in 2 years so we wouldn't get trapped. Unfortunately, a lot of people that used these products just didn't really understand what they were signing up for, and banks were way too free in approving people, especially for more than they could qualify for. If we were in the same financial state now as we were back then, and we tried to apply for a home loan, we would have a MUCH harder time getting approved.

bmo88 · November 2015

@dragonstarjk My only question is how much have you paid in closing costs each time you refinanced? We looked at refinance but paying $2-3k to do it was a little cost prohibitive depending on how long we stay in our home.

We built our home in 2014. We have a first and second mortgage. We put 10% down and to avoid PMI we got a 2nd mortgage for $27k (10%).

1st - 30 year at 4.25%
2nd - 15 year interest only at 5.99% but we are paying it off in 3 years.

We are glad we made this choice. We thought about waiting another year to save up 20%, but so lucky we didn't. We live in Colorado and the market is climbing quickly. Our home would have cost another $30-$40k more if we waited.

We have thought about refinancing to a 15 year, but instead we just pay double mortgage payments to pay it off faster.

Our mortgage payment is about 18% of our take home pay.

CuriousKiddosMama · November 2015

We decided to go with a 30 year mortgage because there wasn't too much of a difference in the rates at the time. I'm jealous of some of your low rates, but I feel like our is still pretty good. We are at 4.25%. We are currently paying it like a 15, but since we are a single income household, I liked the flexibility a 30 year gave us as a just in case. We are actually hoping to have it paid off soon, after we sell our other house, but with the insecurity for dh's job right now (oil industry) I'm really glad we made this choice.
If he does lose his job, I only need to substitute 7-8 days a month to pay the mortgage as opposed to 12-13 if we had gone the other way.

als1982 · November 2015

We just refinanced into a 15 year at 3.375%. Previously, we had a 30 year at 5.25% that I aquired as a single person in 2009 (when they offered the $8,000 first time buyers incentive). After refinancing, our payment has only gone up about $150, but it will take 17-19 months to recoup the closing costs. And our mortgage payment is less than 20% of our take home pay.

ETA: At the time of original purchase, I put 3.5% down and at refinance we had 18% paid off. Right now, our PMI is less than $30 a month and should go away in 2016.

dragonstarjk · November 2015

bmo88 said:

@dragonstarjk My only question is how much have you paid in closing costs each time you refinanced? We looked at refinance but paying $2-3k to do it was a little cost prohibitive depending on how long we stay in our home. We built our home in 2014. We have a first and second mortgage. We put 10% down and to avoid PMI we got a 2nd mortgage for $27k (10%). 1st - 30 year at 4.25% 2nd - 15 year interest only at 5.99% but we are paying it off in 3 years. We are glad we made this choice. We thought about waiting another year to save up 20%, but so lucky we didn't. We live in Colorado and the market is climbing quickly. Our home would have cost another $30-$40k more if we waited. We have thought about refinancing to a 15 year, but instead we just pay double mortgage payments to pay it off faster. Our mortgage payment is about 18% of our take home pay.

If I recall, the first time we refinanced was about $2K, but that time wasn't optional since we had the ARM. The second time we refinanced, I had started my job at the bank and we got a significant employee discount on closing costs so the interest rate difference made it worth it. Our real estate department typically advises that if it will lower your rate by at least 1%, it's worth it to refinance. Of course, like you said, it depends how long you plan to stay in the home. If you are going to leave in a few years, you might not recoup the closing cost. We are planning to stay in our home until retirement so we will definitely save with the lower rate.

lbonga1 · November 2015

We rent right now, but I'm been looking into options for when we decide to buy. We live in a HCOL area, and will probably be moving to an even higher COL area by the time we buy. I want to save at least 10% for a down payment though. Our first home will likely be a starter home, and I was thinking of getting a 5/1 ARM to take advantage of the low interest rate, then when the first 5 years are close to being up, we will move to our *hopefully* forever home, preferably with a 15 year fixed mortgage. That's my plan anyway.

blondie42107 · November 2015

We have a 15 year at 2.9%.

vlagrl29 · November 2015

Mustard76 · November 2015

Were in a 30 year fixed at 3.75%. Our payment is roughly 28% of our take home pay, including taxes, retirement contributions, HSA deductions, and savings deposits. My opinion on this differs from many on this board, but my life situation is different. We move every few years, so I have no desire to get into a 15 year mortgage. I have no need to accelerate my payments right now. We've lived in 3 states in the last 4 years. Our circumstances dictate that I would rather have the flexibility of a lower payment of a 30 year loan. If we end up staying here for awhile, fine, I'll make additional payments. But for now, that extra cash is better used elsewhere.

brij2006 · November 2015

When we did have a mortgage, it was a 15 year at 2.275%. We got insanely lucky and refinanced 2 years ago when the rates plummeted.

Before that, we had a 5 year balloon loan (never again). It was a 30 year at 5% when we took it out in 2009.

JoanE2012 · November 2015

We have a 30 year at 3.375. I think we're in our forever home - partly because I don't want to get another house with a rate that would likely be higher!

Xstatic3333 · November 2015

4.34 on a conventional 30-year fixed, but we only put 5% down. Feeling like I should have shopped around more! This is a long-term home for sure, and possibly a forever home.

abrewer5 · November 2015

We have a 30 year at 3.4%. In hindsight we rushed buying a house, but you live and learn. We didn't put any money down. Next time around I'm hoping to put 20% down and possibly do a 15 year if we afford both... I like the idea of having a cushion by financing for 30 even if we pay it off in 15 or 20. So we'll see how rates are when the time comes.

cbee817 · November 2015

We bought the house in 2007- 30 year at 6.375% with 10% down. We refinanced in 2010 to 15 year at 4.00% and got rid of our PMI. We're unsure if this is our forever home- the biggest reason to move is for the girls but that can't happen until Spring 2017 at the earliest (DD#2 needs to finish day care first) We would move to the top school district in our area (where DH teaches) and houses are at least twice the price we paid for our home. We would probably get a 30 year mortgage and just pay extra to get it paid off in 15-20 years. It depends on how much we get for this house and how much work the new house needs.

jtmh2012 · November 2015

We're at 4.125% fixed on a 20-yr that has about 18 years left on it. We've also been making extra payments, so actually less than the 18 yrs.

jessica490 · November 2015

We have 4.3% on a 30 yr loan

formerlyGDaisy09 · November 2015

we just did a refinance to a 7/1 ARM this summer, with a $40K construction rider to finish the basement, add solar, and replace all the windows in the house. so we have a 30 year loan with 3.125% interest for the next 7 years, after that its adjustible on a yearly baisis, but it's caped at 2%, so it'll never be higher than 5.125%, there is also a yearly cap that is lower than that, so it can't jump from 3.125 to 5.125.

This is not our forever home, we actually figure that in about 7 years we'll be looking for our forever home.

simplyelise · November 2015

formerlyGDaisy09 said:

we just did a refinance to a 7/1 ARM this summer, with a $40K construction rider to finish the basement, add solar, and replace all the windows in the house. so we have a 30 year loan with 3.125% interest for the next 7 years, after that its adjustible on a yearly baisis, but it's caped at 2%, so it'll never be higher than 5.125%, there is also a yearly cap that is lower than that, so it can't jump from 3.125 to 5.125.

This is not our forever home, we actually figure that in about 7 years we'll be looking for our forever home.

I know you got some incentives for your solar, but are you going to have recouped your investment within 7 years?

julieanne912 · November 2015

We bought in Feb of this year and are at 4.375% on a 30 year loan, with 10% down and paid the PMI up front. We had enough to do 20% but the home is brand new, and didn't come with a driveway (other than some crushed rocks put down, which don't last long) or any landscaping, and it's on an acre. So we decided to keep the cash to help pay for those projects, and to maintain a decent amount in savings.

littlemushroom · November 2015

We have 3.64% on a 30 year conventional fixed rate that we got in May of this year with 20% down. We will be paying it off in about 17 years if nothing changes with our jobs.

We went with the 30 because we wanted the flexibility of a lower payment in case one of us lost our jobs. We can afford all of the necessities without dipping into savings on one salary with the 30 year payment, which was a sense of security we wanted. This will likely be our forever home because I don't want to be paying a mortgage in my 50s.

julieanne912 · November 2015

BTW, when I bought my first house in 2001, my rate was 6.25% and that was with a 25% downpayment and my mom on the loan with me....AND it was considered to be a really good rate. So all these 4%ers and below are awesome!

formerlyGDaisy09 · November 2015

simplyelise said:

formerlyGDaisy09 said:

we just did a refinance to a 7/1 ARM this summer, with a $40K construction rider to finish the basement, add solar, and replace all the windows in the house. so we have a 30 year loan with 3.125% interest for the next 7 years, after that its adjustible on a yearly baisis, but it's caped at 2%, so it'll never be higher than 5.125%, there is also a yearly cap that is lower than that, so it can't jump from 3.125 to 5.125.

This is not our forever home, we actually figure that in about 7 years we'll be looking for our forever home.

I know you got some incentives for your solar, but are you going to have recouped your investment within 7 years?

It's going to be close, estimated return on investment was 6-8 years, honestly, depending on what mortgage rates are in 7 years we may stay longer, it's just convenient that the 7/1 ARM keeps the interest rate low for about the time we're certain we'll be in the house. There's a long back-story here, but the bank actually screwed a whole bunch of stuff up with our refinance and essentially forced us into a contract with the solar company before they had final approval on the mortgate (they told us we were approved, but needed a signed contract with solar before they could set the closing date, turns out there were a few other things not finished on their end, had we been aware, we would not have moved forward with the solar). the good news is, that refinancing allowed us to do all this work on the house and our monthly mortgage payment did not change...so budget-wise for the next 7 years we're at zero-change each month for mortgage but saving ~$100-150 a month on electric. The last electric bill before solar went on was $158, the following month was $12.13. not to mention the electric/propane savings the new windows should give us. we were the last home in the area that our utility company approved for net metering (which would carry-over to furture owners) and we squeeked in while the state program still had money in their solar program, so our timing couldn't have been better.

I did report our bank to the FCC, they remedied their colossal mistakes (the above mentioned being only one of several) by refunding a portion of our closing costs and lowering our interest rate.

orangehills · November 2015

We are closing on our house Wednesday, and ours is 3.875. We met with a financial adviser (a good one!) and she advised us to not put everything in to the house, but put some in to retirement. If you can save enough for retirement while paying off more on the mortgage, go for it! If not- I'd do normal 30 year..

Also- rates are going up right now, and expected to more in Jan. We live in CA and you can't even get 3.875 anymore (we locked in to it 2 months ago) for a 30 year loan!

lbonga1 · November 2015

I'm actually kind of surprised that so many have 30 year mortgages. Am I the only one bothered that for the first ~10 years the payments are going mostly toward interest?

Edited because I'm still drinking my coffee, and my grammar sucked.

Xstatic3333 · November 2015

lbonga1 said:

I'm actually kind of surprised that so many have 30 year mortgages. Am I the only one bothered that for the first ~10 years the payments are going mostly toward interest?

Edited because I'm still drinking my coffee, and my grammar sucked.

I'm bothered by it, sure. Rationale of why we did it anyway: much cheaper to buy then rent in our city, wanted to buy while the rates were still low, would rather put more to retirement or other goals, were able to get a house that is well below 25% of our take home. Like several PP mentioned, I also like the security of a low minimum payment that I can simply pay extra on to accelerate the process and save on interest. Unlike many other posters we do plan to prepay on our mortgage at some point in the future. I know we can get a better return on the stock market, but I just love the idea of a paid for home and the security that it brings. Right now retirement is just a higher priority. My 6.8% SL may also be a higher priority, but I haven't decided yet. Bottom line is, there were more pros for us than cons. I certainly can't blame anyone for making a different choice, however.

jtmh2012 · November 2015

julieanne912 said:

BTW, when I bought my first house in 2001, my rate was 6.25% and that was with a 25% downpayment and my mom on the loan with me....AND it was considered to be a really good rate. So all these 4%ers and below are awesome!

On my last house, I started off at 6% fixed. I just looked at rates this morning and now I'm considering a call to the bank and see if about maybe doing another refinance. 3.25% on a 15yr. Tempting.....:)

julieanne912 · November 2015

lbonga1 said:

I'm actually kind of surprised that so many have 30 year mortgages. Am I the only one bothered that for the first ~10 years the payments are going mostly toward interest?

Edited because I'm still drinking my coffee, and my grammar sucked.

Sure, but it's still better than renting. Our old house was less per month, but we knew it wasn't the house/area we wanted to stay in to raise a kid etc. We pay extra when we can, but right now we have a lot of expenses so it doesn't always happen.

It's our "forever" home so we're feeling the pain right now, we'll sure be happy when we have it paid off a few years before retirement. It's actually even a home we could live in til we die as it's pretty much all one level, and would be very easy to make handicap accessible if needed.

ETA: No way could we have afforded a 15 year loan. We stretched ourselves to afford this house because it was our "dream" house that could carry us to end of life if needed. The cheaper homes we looked at would have been fine for 5-10 years, but then we'd have to start all over again to get what we really wanted.

csuave · November 2015

Xstatic3333 said:

lbonga1 said:

I'm actually kind of surprised that so many have 30 year mortgages. Am I the only one bothered that for the first ~10 years the payments are going mostly toward interest?

Edited because I'm still drinking my coffee, and my grammar sucked.

I'm bothered by it, sure. Rationale of why we did it anyway: much cheaper to buy then rent in our city, wanted to buy while the rates were still low, would rather put more to retirement or other goals, were able to get a house that is well below 25% of our take home. Like several PP mentioned, I also like the security of a low minimum payment that I can simply pay extra on to accelerate the process and save on interest. Unlike many other posters we do plan to prepay on our mortgage at some point in the future. I know we can get a better return on the stock market, but I just love the idea of a paid for home and the security that it brings. Right now retirement is just a higher priority. My 6.8% SL may also be a higher priority, but I haven't decided yet. Bottom line is, there were more pros for us than cons. I certainly can't blame anyone for making a different choice, however.

All of this. And I think the rate has a lot to do with decisions described here. Paying for a 3.5% loan vs the ROI of other options makes the other options more attractive in the immediate time frame. In a few years if other options are no longer more attractive there is always the option to accelerate payments and decrease the 30 year term.

short+sassy · November 2015

My rate is 4.9% on a 30-year. A little on the high side, but my credit was a bit sucky at the time. I put 20% down. My mortgage is 14% of my income, but also includes insurances and taxes.

I didn't go with a 15-year because the rate wasn't that much less and I'd rather have the flexibility.

There is no cheaper money you can get than with a mortgage on an owner occupied property.;

Just for some contrast, I also have a recent commercial residential property loan. I was required to put down 25%. The payment is based on a 20-year amortization, but there is a balloon payment at 5 years, so I will need to either pay it off by then or refinance. The rate is 5.75%. I discovered a high down payment, 10-20 year amortization, balloon payments, and a higher interest rate are very typical of non owner-occupied real estate loans. Not surprising.

The mortgage payment, plus insurances and taxes, is 34.5% of the estimated monthly rental income. Though this is certainly a different beast with a different puprose than a typical home loan.

abrewer5 · November 2015

lbonga1 said:

I'm actually kind of surprised that so many have 30 year mortgages. Am I the only one bothered that for the first ~10 years the payments are going mostly toward interest?

Edited because I'm still drinking my coffee, and my grammar sucked.

Is it ideal? Definitely not, but I know we own a home for less than we could have rented so I'm ok with it. To rent in our neighborhood it would be $300-400 more per month than our mortgage. Our interest is pretty low and we don't have PMI so in the two years we've lived in our house we've actually paid about $10K towards principle which isn't horrible. I'd rather get at least a little return on investment by owning with a 30 year mortgage than paying for someone else's investment... Just my personal opinion. If we could have afforded a 15 year mortgage I would have done it. I wasn't as MM two years ago.

What is your mortgage rate?

Re: What is your mortgage rate?

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