Highest Mortgage Rate Jump Since '87
October 16th, 2008
Categories:Real Estate News
CNN Money states “Rate on 30-year fixed mortgage jump could climb higher still. One cause: Government’s rescue efforts.”
Freddie Mac reported the average rates for a 30-year-fixed-rate mortgage jumped from 5.94% last week to 6.46%, and it was the largest weekly increase since April 1987, when the jump was 0.84 points.
Ok, so now that we have the frightening news put aside, lets look at some numbers.
Lets assume you were to go out and get a 200,000 mortgage.
- Last week, your monthly mortgage payment would have been $1,225. This week, you’d be paying $1,295 at the 6.74% interest.
- If you were looking for a mortgage back in the 1980′s you’d be looking at 18% interest rate and a monthly payment of $3,014.
I think I’ll take today’s rate thank you. Ok, I’ll admit looking back into the 80′s is a bit of stretch, since after all that was the last time we had a real estate and economy crisis like this one.
Instead of randomly picking dates, I’ve provided a graph below that details our historical interest rate.
The green line is the historical rate with some highs and lows, our lowest being back in Jun of ’03 at 5.23%. The orange line represents a twelve month average trendline. To use this line, take month for example, Jan ’07. The orange line value is approximately 6.25%, this means that from Jan ’06 to Jan’07 the average interest rate is 6.25%.
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