Sara Routhier, Managing Editor and Outreach Director, has professional experience as an educator, SEO specialist, and content marketer. She has over five years of experience in the insurance industry. As a researcher, data nerd, writer, and editor she strives to curate educational, enlightening articles that provide you with the must-know facts and best-kept secrets within the overwhelming world o...

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Joel Ohman is the CEO of a private equity-backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He also has an MBA from the University of South Florida. ...

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Reviewed by Joel Ohman
Founder, CFP®

UPDATED: May 31, 2012

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Both the 15- and 30-year fixed interest rates on mortgage loans broke historic records on Thursday according to Freddie Mac.

The 15-year fixed average dropped below the 3 percent threshold, as it plummeted to 2.97 percent. This is a 0.7 percent change from last week, when it averaged at 3.04 percent, and signals that three of the four benchmark mortgage loan interest rates are now below 3 percent.

The four benchmark mortgage loans are the 15-year fixed-rate, 30-year fixed-rate, 5-year adjustable-rate, and the 1-year adjustable-rate.

The 30-year fixed average dipped to an astounding 3.75 percent, setting a record low for the fifth consecutive week. While this is the only benchmark mortgage loan sitting above 3 percent, it is providing potential homebuyers with an opportunity to borrow money for an extended period of time at a price never seen before.

As a point of reference, the 30-year fixed interest rate was at 4.55 percent this time last year.

“Compared to a year ago, rates on 30-year fixed mortgage rates are almost 0.9 percentage points lower which translates to nearly $1,200 less in annual payments on a $200,000 loan,” explained Frank Nothaft, Freddie Mac’s vice president and chief economist, in a release.

A decade ago, in the year 2002, the 30-year mortgage rate sat at 6.89 percent.

Consider again that $200,000 mortgage loan Nothaft described. If the total cost for that mortgage loan at 3.75 percent is compared with the total cost at 6.89 percent, a lifetime difference of over $140,000 would be seen.

Couple that massive savings amount with the fact that housing prices have dropped 33.8 percent from the boom-time years of the mid-2000’s, and we begin to see the necessary signals announcing that the perfect time to finance a mortgage loan is now here.