Mortgage rates drop to lowest in 40 years

Advertiser Staff

Homebuyers and refinancers, listen up.

Average 30-year and 15-year mortgage rates for Hawai'i have hit their lowest point in about 40 years.

And rates may drop even further next week.

The 30-year rate fell to 5.4 percent this week from 5.53 percent last week, according to the Honolulu Board of Realtors. The 15-year rate dropped to 4.82 percent.

The average is based on more than 40 mortgage issuers' annual percentage rates and assume a $200,000 fixed-rate, owner-occupant mortgage, including points, fees and other transaction costs.

Harvey Shapiro, research consultant for the board, said rates have been at a 41-year low, and could decline even further next week.

This week, the yield on the 10-year Treasury note, a benchmark for mortgage rates, dropped. When that happens, interest rates can fall.

Mortgage broker Don Lau said the rate he was offering yesterday of 4.25 percent on a 15-year loan was the lowest he has seen in 40 years. He added that the 5.125 on a 30-year loan was "the lowest I've ever seen."

But Lau said he doesn't expect the rates to drop much lower. "How low can you get?" he said.

Lau said it is a good time for consumers to consider refinancing a loan. He said the general rule is to refinance if there is 2 percent difference between an existing mortgage and a new rate.

"Even a 1 percent difference, if you have a $300,000-$400,000 loan, you save a couple of hundred bucks a month, and you recoup your costs in sometimes two or three years," Lau said.