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Mortgage Rates Hit Historic Lows

By News 13

Story Created: Jul 30, 2010 at 7:02 AM EDT

Story Updated: Jul 30, 2010 at 7:02 AM EDT

Housing prices are at record lows and mortgage rates are lower than lenders have seen in 25 years, making it the perfect time to buy or refinance your home.

For weeks, mortgage rates have been hovering around the 4.75 mark for 30-year fixed loans, and below 4 percent for 15-year mortgages.

Mortgage lender Liz Monaghan says the reason is threefold: The value of the Euro is declining, more Europeans are investing in the American bond market, and with a volatile stock market, investors are looking for more stable investments.

The high unemployment rate is also helping to keep rates low.

So how much can you save? If your loan is over $200,000, you'll see the most benefit.
For example, at $200,000 and a rate of 6 percent, refinancing down to a 4.75% will save you about $160 each month.

But you will pay about $2,500 in closing costs, so you will need to stay in your home for about 18 months to realize those savings.

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