Are there really mortgages at 4.5%?

Asked by Rgr, San Francisco, CA Mon Dec 22, 2008

I just got my back to lowere my interest rate from 6.5 % to 5.3% w/no closing costs for a 30 yr. fixed, conforming loan. I was happy until I read the article on the front page of the Chroncle on Friday. I looked for loan rates on my credit union's website and a couple of other places, and I don't see any 30 year fixed mortgage rates at 4.5%. (the lowest I saw is 5.25 with closing costs). Is there really such a thing, or should I be happy with what I was able to get from my bank?

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Julia Murtagh, Agent, Pleasanton, CA
Mon Dec 22, 2008
Hello Rgr,
We do expect the rates to drop down , POSSIBLY , to the 4.5% range for purchase only in the next few months. We have not seen these rates yet. You should be able to get the 5.175 t0 5.25 , 30 year fixed. These are great rates, but do not pay ANY costs! Remember, you can re-finance every 6 months, so you can grab the lower rates if they keep dropping.
Good Luck!

Julia Murtagh
Alain Pinel realtors
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1 vote
Ted Rood, Mortgage Broker Or Lender, Maryland Heights, MO
Sun Mar 23, 2014
Yeah, not sure who's writing loans at 5.25%, but that's ridiculously high. Best execution rates for conforming loans are now in the mid 4's. Each borrower's rate is based on a number of factors, including loan purpose and programm, credit score, property type, and loan size. Want an exact quote? Glad to help, I write loans nationwide. Give me a call or shoot me an email! Thanks, Ted
0 votes
Robert Krop, Agent, Frederick, MD
Thu Mar 20, 2014
It all depends on factors like your credit score, down payment, debt to income ratio, etc. Right now Lenders are right around 4.5%. I just had a client get locked in the other day at 4.25%. Check around with a few lenders in your area.
0 votes
Mitchell Lub…, Mortgage Broker Or Lender, SHERMAN OAKS, CA
Tue May 28, 2013
Your interest rate depends on your loan amount, equity in your home (loan to value ratio)credit score, and income.
Approximately 3 weeks ago we have refis no cash out at 3.375% fixed rate for 30 years with no closing costs at all, for loan amount from $299,000 to $417,000, middle credit score of 760 plus, loan-to-value ratio max 70% and income back debt ratio max 45%.
Today we had the rate between 4.000% and 4.125% under the same terms. Usually we don't charge any closing costs and our rates are lower that at the banks and credit unions for 1.5% to 2%. Our closing is much faster than at the banks and usually is 3-4 weeks.
0 votes
Grace Tam, , Dublin, CA
Thu May 9, 2013
Hi Rgr,

If you have refi your loan in 2008, You should refi it now again, 30yrs fixed is historically low now.
Conforming loan 30yrs fixed is 3.5% no closing cost. Loan amount up to 417k. Rates based on fico anf LTV. You can call to find out more.
0 votes
James Testa, Agent, San Francisco, CA
Tue Dec 30, 2008
Hi Rgr,

4.5% is a very low rate and I have not heard of anyone getting such a find! ...that is not to say there are not great deals on mortgage rates. Credit unions are a great option and I would also suggest talking with a mortgage banker. These folks are a hybrid between a traditional mortgage broker and a retail bank.

I also do not recommend paying close attention to The Fed to determine retail interest rates. The prime rate has not been a good indicator of the retail cost of money.

Please feel free to contact me if I may provide any further information.

James Testa
Paragon Real Estate Group
0 votes
The Hagley G…, Agent, Pleasanton, CA
Tue Dec 30, 2008
5.3 is a great rate....congrats!
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Daniel, , Baton Rouge, LA
Mon Dec 29, 2008
not any more!

Mortgage refis surge
By Holden Lewis •

Mortgage rates went up this week from near-record lows as brokers and bankers scrambled to keep up with an influx of applications
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Rhonda Porter, , Seattle, WA
Mon Dec 29, 2008
4.5% was leaked by the media and heavily pushed by groups who may benefit for purchase mortgages at 4.5%. It's artificial.

With the gov. buying mortgage backed securities (which mortgage rates are based on) rates have dipped down. They were around 4.5% for a whole 2 hours and zipped right back up. Only the most prime borrowers who were ready to lock were able to obtain the lowest rate in years. Those who had to sit and think about it missed out just because of how quickly the rates changed. Those who weren't prepared by pre-applying or pre-locking with their LO missed out. LO's did not have time to contact their clients to see if they wanted the "it" rate...if they did, by the time they was gone.

So, yes Rgr, there was a 4.5% (I'm tempted to say "Yes...there is a Santa Claus")...could there be again? Maybe...but it's not guaranteed.

If you have no closing costs and you're dropping your rate over a point--lock it and count yourself lucky. You're breaking even on closing costs right away and when/if rates improve to 4.5% or who knows what, it's no skin off your nose to refi again.
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Fred Glick, Agent, Mountain View, CA
Sun Dec 28, 2008
The 4.5% that the Fed was talking about would be for purchases only and have many strings attached!

If you are going to save a good amount of money and not have it cost you anything, do it! If it drops enough, do it again. Don't miss these low rates!
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0 votes
Tony Grech, Mortgage Broker Or Lender, Southfield, MI
Sat Dec 27, 2008
Sure there are really mortgages at 4.5%, however youd have to pay closing costs AND probably 2-2.5% in points to get that rate.

RATE is not always the most important thing. What's most important is how much you save and how much you PAY for those savings.

Consider this: on a $200,000 mortgage, dropping from 6.5% to 5.3% for free saves you about $154 per month. To get 4.5% you'd probably have to pay $1500 in closing costs plus $4000 in points and you would save $250 per month.

Which sounds better to yo - saving $154 for free or paying $5500 to save $250? In other words is it worth paying $5500 to save an extra $100 per month?

Only you can answer that question, but I always say a good deal is a state of mind. I think you should be pretty happy you were able to save some money, and the beauty of the no cost refinance is that if rates drop 1/2% in the next few months you can do it again. You'd probably regret it if you paid $5500 now for a rate you could get for free down the road.
0 votes
Luke Allison, , Asheville, NC
Mon Dec 22, 2008
5.3% with no closing costs is very good right now since most Mortgage-Backed Securities are not paying a lot of rebate right now because the demand is so high. The fact that closing costs in California can be so expensive and you can get a flat rate at 5.3% with no cost is a very good thing.

For today, I would take that and run with it.
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