Refinancing borrowers “overwhelmingly” moved into 30-year fixed-rate mortgages in the third quarter, according to a Freddie Mac product report. Freddie said 15-year and 20-year FRMs also have grown in popularity in recent quarters. Overall, more than 95% of refinanced loans moved into FRMs. Throughout the third quarter, the 30-year FRM rate dropped to just over 4.25%, levels that have not been seen since the 1950’s. For the week ending Nov. 11, the 30-year FRM reached 4.17%, a new record low. “It’s no wonder borrowers are attracted to fixed-rate loans,” Freddie Mac Chief Economist Frank Nothaft said. Nothaft said more borrowers are shortening their amoritization terms. While there is a discount for shorter terms, monthly payments are about 50% higher than the 30-year, but with rates so low, shorter terms are becoming more popular. “What we’re seeing now is that the level of the 15-year payment is becoming more affordable to more borrowers,” Nothaft said. Write to Jon Prior.
Freddie Mac: Refinancing borrowers big fans of fixed-rate mortgages
Most Popular Articles
Latest Articles
Opinion: More can be done to shorten the average time to close
As the title industry finally tries to automate its core processes, it’s time to address some of the more granular chokepoints.