Getty Images
If you’re looking for a cheap way to access a large six-figure sum of money, you’ll be hard-pressed to find a better option than your equity. Not only does the average homeowner have approx $330,000 in equity use now, but they can also do this at a later time interest significantly lower than what can be secured with alternatives such as credit cards and personal loans. And those interest rates are especially true for home loans fixed for the entire repayment period, unless refinanced by the borrower.
That said, it’s important to time your mortgage loan application so you can get an attractive interest rate. To do this, borrowers may find it useful to gauge how much interest rates on this product have fallen, especially this year as inflation has fallen and multiple interest rate cuts have been issued. Below we show how far home loan rates have fallen in 2024 for both 10- and 15-year loans, and explain why now could be a smart time to act.
See here how low the interest rate on a mortgage loan is that you can get.
To what extent will interest rates on home loans fall in 2024?
Mortgage loan rates for both loan terms have fluctuated at the same level for most of the year, but have fallen significantly in recent months. According to Bankrate historical data, the interest rate on 15-year home loans was 9.08% on January 3, 2024, but fell to 8.87% on February 14. 10-year home loans, meanwhile, averaged 8.73% as of March 27. .
In May, 15-year mortgages averaged less than 8.80% and in August they were below 8.70%. The 10-year home loans reached 8.61% in early September and both broke below 8.50% in early October: 8.47% for the 10-year home loans and 8.37% for the 15-year home loans. And they have remained within that range ever since, with 10-year home loans averaging 8.52% on November 13, while 15-year home loans averaged 8.44% on the same date.
Between January 1 and mid-November, interest rates on home loans fell by more than half a percentage point. And while that may not seem substantial on paper, that difference can add up to hundreds and possibly thousands of dollars saved over the life of the loan. For many, it may therefore be worth taking advantage of this rate cut as lenders continue to offer better deals.
Get started online now with a mortgage loan.
Is it worth opening a mortgage loan now?
The decision to open a mortgage loan is a personal one, especially when you consider that the home serves as collateral in this exchange. That said, a compelling argument can be made for opening a mortgage loan right now. The rates for the product are lower than all year round. But with inflation rises in Octoberit is possible that they will not fall much lower, at least in the near future.
Plus, by acting now – and by using a mortgage loan for IRS-eligible housing projects – you’ll qualify for deduct the interest paid about the loan when you file your tax return for 2024 in the spring. If you delay taking action, that deduction will have to wait until you file again in 2026. And if the rates somehow drop much further than they already are, you always can refinance then – but still get the financing you need now.
The bottom line
Mortgage loan rates have been falling for most of 2024, making the final weeks of the year a smart time for many homeowners to take action. And because interest rates may remain static rather than continually dropping significantly, many homeowners would benefit from acting now, especially if their financial needs cannot be deferred. Still, it’s crucial to approach this lending option with care, as you could lose your home if you don’t pay back everything you took out.
Read more about the options for borrowing your own home here.
