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Average Rate for 30-Year Fixed-Rate Mortgage at 65-Year Low

With a housing recovery taking root, mortgage interest rates have tumbled the last few years. The average interest rate on a 30-year fixed-rate mortgage in 2012 was 3.66 percent, according to data recently released by Freddie Mac.

That's the lowest annual average rate since 1947, according to Freddie Mac vice president and chief economist Frank Nothaft.

For this year, interest rates are ending the year lower than where they were at the beginning of 2012.

"Rates on 30-year fixed mortgages were nearly 0.6 percentage points below that of the beginning of the year, which translates into an interest payment savings of nearly $98,600 over the life of a $200,000 loan," Nothaft said in a news release. "Moreover, opting for a 15-year fixed mortgage at today's rates, a homeowner could save an additional $138,400 in interest payments."

Rates Down

Here's a look at the breakdown:

  • The 30-year fixed-rate average was 3.35 percent for the weekend ending Dec. 27. At this time a year ago, the rate averaged 3.95 percent.
  • The 15-year fixed average was 2.65 percent, down from 3.24 percent the year prior.
  • The 5-year Treasury-indexed hybrid ARM average was 2.70 percent, down from 2.88 percent the year prior.

Refinance Boom

The dip in interest rates fueled a surge of refinance applications at lenders nationwide. Qualified military homeowners can explore the VA's refinance options, the Interest Rate Reduction Refinance Loan (IRRRL), which is also known as a VA Streamline, and the VA Cash-Out refinance. The Streamline is only open to current VA borrowers. Qualified homeowners may be able to use this program to obtain lower rates and lower their monthly mortgage payment.

Refinancing may result in higher finance charges over the life of the loan.

The Cash-Out program allows qualified homeowners -- regardless of their mortgage type -- obtain lower interest rates and extract cash from their equity. Veterans with conventional mortgages or ones backed by the FHA can refinance into a VA loan using their home loan benefits.

You can talk to a Veterans United loan specialist about refinancing at 855-870-8845.

To learn more about rates and how they play in the overall process check out this Comprehensive VA Loan Guide.