Mortgage rates vary slightly from state to state, and on average, Colorado mortgage rates tend to stay close to the nation’s median rates. If you’re thinking about relocating to Colorado, it’s important to look at the current mortgage interest rates in the area, and it’s critical to consider how these rates compare to rates in other areas or how they may change in the upcoming months or years.
Here’s a look at what’s happening with Colorado mortgage rates, how it compares to other areas and an analysis of upcoming trends.
What are the average Colorado mortgage rates?
As of the second week of February 2016, the average rate for a 30-year fixed rate mortgage in Colorado is 3.81 percent. This is a slight increase of .06 percent over the 3.75 percent rate from the previous week.
Buyers who take out a 15-year fixed-rate mortgage enjoy substantially lower rates, and during the second week of February 2016, the average Colorado mortgage rates for a 15-year fixed-rate loan is 2.77 percent. This is .03 higher than the rate for 15-year fixed rate-mortgages from the previous week.
What are the average Colorado mortgage rates for refinanced mortgages?
In most cases, in order to refinance your mortgage, your current mortgage needs to have an interest rate that is at least 1.5 percent lower than the rate on your new mortgage, and in many cases, you must have at least ten years left on the life of your loan.
Colorado mortgage rates for refinanced mortgages are slightly higher than the same type of loan on a new purchase. Colorado homeowners who refinanced to a 30-year fixed-rate mortgage in February 2016 faced an average interest rate of 3.82 percent, while those who refinanced to a 15-year fixed rate-incurred an average interest rate of 2.81 percent.
In order to qualify for these loans, the homeowners likely had existing mortgages with interest rates ranging from 3.31 percent to 4.32 percent and higher.
What are Colorado Mortgage Rates for Adjustable Rate Mortgages?
For 5/1 adjustable-rate mortgages in Colorado, the average rate during the second week of February 2016 was 2.98 percent, and during the same time period, 7/1 adjustable-rate mortgages had an average rate of 2.99 percent.
With 5/1 ARMs, homebuyers enjoy the introductory interest rate for five years, and then, the rate adjusts every year until the loan is refinanced or paid off. For 7/1 ARMS, the introductory rate lasts for seven years, and then, the rate automatically adjusts annually until the loan is paid off or refinanced.
Does the Bank I Choose Affect My Colorado Mortgage Rates?
Rates also vary based on the bank that finances the mortgage. As of February 2016, the average rate for a 15-year fixed-rate mortgage from Rate 30 is 2.830 percent. At Sebonic Financial the rate for the same type of mortgage is 2.855 percent, and at First Internet Bank and Aurora Financial, the average rate is 2.9 percent.
However, other factors such as your personal credit history also affect the final interest rate you pay on your mortgage.
How Do Colorado Mortgage Rates Compare to National Averages?
Compared to Colorado mortgage rates, the nation’s averages are just slightly higher. For a 30-year fixed-rate mortgage, the average national rate for February 2016 is 3.88 percent. This is .07 percent higher than the average rate in Colorado. This small fraction of a difference doesn’t relate to large long term savings. In fact, if you bought a $300,000 home with a 30-year fixed-rate mortgage, you would save just over $4,300 over the lifetime of your loan.
For a 15-year fixed-rate mortgage, the national average is 3.15 percent. This is nearly 1 percent higher than the average rate for the same type of mortgage in Colorado, and that .97 percent difference can relate to substantial savings over the life of the loan.
In particular, on a $300,000 home, with a 3.15 percent interest rate, your monthly payment is $2,093, but with a 2.177 percent interest rate, the monthly payment is $1,955.  Over the lifetime of the loan, the lower Colorado mortgage rates result in a savings of $17,640.
What is Going to Happen to Colorado Mortgage Rates in 2016?
Although it’s impossible to flawlessly predict whether Colorado mortgage rates are likely to go up or down, many analysts assert that mortgage interest rates in Colorado and throughout the rest of the country are likely to increase through 2016.
As of early 2016, Mortgage Backed Security bonds have been behaving erratically, and if the erratic behavior of these securities scares investors away, it could devalue these investments and ultimately lead to slightly higher interest rates.
In addition, the unemployment rate is currently at 5 percent, the lowest it has been since 2008. This fact, combined with other markers that the economy is moving in a healthy direction, may inspire the Federal Reserve to raise the rate.
However, that may also depend on the inflation rate. In most cases, the Federal Reserve looks for an average annual inflation rate of 2 percent, but unfortunately, over the last few years, the rate of inflation in the United States has been decidedly low. In fact, in 2015, inflation was at just .7 percent. If this turns around in 2016 and the rate skyrockets to 2 percent or higher, the Federal Reserve is very likely to offset the increase in inflation with higher mortgage interest rates.
What is the Bottom Line with Colorado Mortgage Rates?
In general, Colorado mortgage rates tend to be the same or slightly lower than rates in the rest of the nation. This can save buyers thousands or even tens of thousands over the lifetime of their loans, but buyers may want to act fast before the rates change.
2 Point Highlight
This can save buyers thousands or even tens of thousands over the lifetime of their loans, but buyers may want to act fast before the rates change.
If you’re thinking about relocating to Colorado, it’s important to look at the current mortgage interest rates in the area, and it’s critical to consider how these rates compare to rates in other areas or how they may change in the upcoming months or years.
