Current Home Loan Rates In Austin


When choosing a mortgage loan anywhere in the US, one of the major decisions you have to make is the type of interest rate you will be paying, how you’ll be paying it and for how long. Lenders have come up with several types of interest rates each with different features and advantages as well as disadvantages. Some are more common than others while some are more favourable than others. The various types of mortgage interest rates availed by mortgage lenders in Austin include:

Fixed -rate mortgages- These are the most popular in Austin. Their interest rates as well as the monthly payments remain the same throughout the term of the loan. They are also fully amortizing because at the end of the period one is usually required to have covered the total loan amount. With a fixed- rate mortgage, the shorter the term period the less interest one is expected to pay. This is because lenders take on less risk with a shorter term loan. One therefore has to choose between making huge monthly payments and paying high interest at the end of the loan. Currently fixed rate mortgages are offered in either 15 year terms, 20 year terms or 30 year terms. However, there are several lenders that offer up to 40 or 50 year terms for properties with very high amounts to be financed.

Adjustable-rate mortgages- For adjustable rate mortgages unlike fixed rate mortgages, the interest rates as well as the monthly payments made for a loan usually change according to changing market conditions. How the interest rates are charged depends on the type of loan you have taken. Banks and lenders also offer hybrid adjustable rate mortgages. These start off as fixed rate mortgages and then later become adjustable after a certain period time, usually 1, 5 or 7 years. The main disadvantage of these hybrid ARMs is usually the fact that they become very uncertain over the long term just like other adjustable rate mortgages.
Balloon mortgage- These mortgages have a short term of slightly more or less than 10 years. They can be made interest-only payments for some time. However, at the end of the very short term period, one is required to have completed the whole amount. This makes them very risky to most borrowers because they have to come up with a huge sum of money over a very short time.

Interest-only mortgage- These types of mortgages allow a borrower to pay very low monthly payments for a certain period of time as they repay the interest accrued on their loan. The amount later rises as they start repaying the principle. They are usually very expensive in the long term. This is because they need you to make higher payments when you begin repaying your principle to make up for lost time. They are however, a good option for first time home buyers who start up with little money at the beginning.

These are all the mortgage interest rates in available to borrowers in Austin and their features.

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