A History of The Fixed Mortgage Interest Rate & Why NOW IS THE TIME TO BUY OR REFINANCE!

Real Estate Agent with Century 21 Absolute Realty RS284559

A History of The Fixed Mortgage Interest Rate & Why NOW IS THE TIME TO BUY OR REFINANCE!

Figure Out Your Savings!Prior to the 1930's mortgages were mainly short-term loans with balloon payments.

In 1934 the FHA (Federal Housing Authority) was created to insure mortgage loans, motivating banks to give loans to low-income borrowers with low down payments with interest rates around 6-7%.

By the end of the 1940's and early part of 1950's interest rates were at 5% for a 20 year fixed loan.

In 1944 the VA (Veterans Affairs) loan program was created

In 1948 the FHA stretched out the loan term to 30 years.

From the mid-1960's most mortgages were at 5-6% interest rate, and were funded by large Commercial Banks or Savings and Loans Associations (S&L's) which were insured by the FDIC (Federal Department Insurance Corp)

In 1970 Rates were at 7.5% Freddie Mac (FHLMC, Federal Home Loan Mortgage Corp) was created to buy loans from the S&L's

Late 1960's and early 1970's interest rates climb 

In late 1970's rates rose from less than 10% to 18% in 3 years!

In 1981 the rate hits 18.5% for 30 year fixed rate mortgage and Adjustable Rate Mortgages (ARMs) are offered

Toward the end of 1985 fixed rates dropped to 9%

In the 1990's interest rates fall below 8%

Until the mid 1990's to get a mortgage borrowers had to disclose income and assets, and have good credit scores   - If you did not have these things, i.e. lower income, no assets, low credit scores, one could still get a loan but at a higher rate

2000 30 Year Fixed Rate was 8%

2008 30 Year Fixed Rate was 5%

From 1970 -2010 30 Year Fixed Rate less than 10% for almost 11 years

2000 - 2009 average rate was 6.3%

2009 Disclosure of income and assets plus good credit scores is required to obtain a mortgage. Interest rates keep dropping

***End of September 2010 - Less Than 4.37% 30 Year Fixed  - Less Than 3.75%  15 year Fixed !!!

History has shown that rates can move quickly upward if economic conditions change!

Right now, Fixed mortgage rates are the LOWEST IN HISTORY!


(Most Info found on Wikipedia.  If you have other information please comment!! - Thank you! - Gloria)


Re-Blogged 3 times:

Re-Blogged By Re-Blogged At
  1. Cara Marcelle Mancuso 09/28/2010 02:21 PM
  2. Kristyn Grewell 09/28/2010 02:31 PM
  3. Jane Peters 09/28/2010 03:21 PM
Lending / Financial
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Cara Marcelle Mancuso
Long Realty - Dove Mountain, Marana AZ - Tucson, AZ
Call a Marana neighbor, I'm THERE! LONG REALTY

Wow - what a great timeline!  Thanks for all of your work - I am going to reblog over here in the SW!

Sep 28, 2010 02:18 PM #1
Kristyn Grewell
CENTURY 21 Goodyear Green Edmond, OK - Edmond, OK
Edmond, OK Homes, Oklahoma Relocation Services

Thanks for taking the time to research and post!  It's well thought out and easy to understand.  I will be sure to reblog here on AR!

Sep 28, 2010 02:28 PM #2
Jane Peters
Home Jane Realty - Los Angeles, CA
Connecting you to the L.A. real estate market

This is a great overview of the history of mortgage rates which I am going to reblog.

Sep 28, 2010 03:19 PM #3
Gloria Todor
Century 21 Absolute Realty - Media, PA
& Doug Durren (484) 431-3686 in SE PA

Cara, Thank you!  Thank you for the reblog!

Kristyn, Thank you!

Jane,  Thank you also.  I was curious about this and just had to share.

Take care!

Sep 29, 2010 07:48 AM #4
Craig Rutman
Helping people in transition - Cary, NC
Raleigh, Cary, Apex area Realtor

Great stuff here you guys. Looks like we both had the same thing on our mind the other day.....

Now is a great time to take advantage of the low interest rates and finally make the move.

Sep 30, 2010 01:04 AM #5
Jim Frimmer
HomeSmart Realty West - San Diego, CA
Realtor & CDPE, Mission Valley specialist

I remember 1981 well. I was 21 and trying to buy a car. I just couldn't afford it with that interest rate and on a college student's salary.

Oct 03, 2010 04:14 PM #6
Inna Ivchenko
Barcode Properties - Encino, CA
Realtor® • Green • GRI • HAFA • PSC Los Angeles CA

Rates are still low and as long as they stay under 6%, most of the buyers decision what to buy likely will not be affected. 

Jan 20, 2018 12:42 PM #7
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Gloria Todor

& Doug Durren (484) 431-3686 in SE PA
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