Is a 4.5% APR a good rate right now

Asked by Robert Woodard, Fort Lauderdale, FL Fri Oct 14, 2011

Trying to determine mortgage companies

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Shane Milne, Mortgage Broker Or Lender, South Jordan, UT
Fri Oct 14, 2011
When someone calls up a loan officer for an "interest rate quote" there are several questions that need to be answered, including some of the most basic:

1. Loan amount
2. Loan-to-value
3. Credit score (which you provided)
4. Purpose (purchase, refinance, cash out refinance, etc.)
5. Occupancy (owner occupied, second home, non-owner occupied)
6. Property type (single family residence, 2-units, condo, mobile home, etc.)
7. Loan product (ARM, fixed rate, etc.)
8. Financing type (FHA, VA, conforming - which may be tough for a consumer to know, but if you do, it's helpful)
9. Loan term (30-year fixed, 15-year fixed, 5-year ARM, etc.)
10. How many points you want to pay (you may have not known, but all interest rates are available pretty much all of the time, but it is the price, as in how much that interest rate costs in points, that varies on a day-to-day basis)

So when you are asking about rates, if you come into the conversation prepared with as much of that information as possible, you'll have a really good chance at getting an accurate quote.

Interest rates & fees are important, but when you are buying a home THE most important thing is being able to qualify and close on time. If it means .125% higher interest rate, or a few hundred more in fees vs. having a horrible experience with a lender, a delayed closing, etc. then it's usually worth it. But don't get me wrong, you don't have to have higher rates and/or fees in order to get excellent service - but typically the lenders who market "price" instead of "service" you don't get much of the latter.
5 votes
Ron Thomas, Agent, Fresno, CA
Wed Jun 12, 2013
Has anybody noticed that this is TWO YEARS OLD?
1 vote
Richard Bre…, Agent, GREENWICH, CT
Sat Oct 15, 2011
Insurance will be the same on every loan. If you were getting a credit back like my client did you could be assured that you would get the lowest possible APR.

In addition if you wanted to figure out if paying points make sense thus a higher APR you would ask your mortgage broker for two rates. One rate quoted with no points and the other with a point or points. Then you would simply calculate the cost of the point.(percent of the loan size) Calculate the monthly payment difference between the two quoted rates and find out where your break even point is. Then decide if it makes sense to pay or not to pay points thus a higher APR.

Assume we are talking about a 30 year fixed monthly principal and interest payment
$200,000 @ 4% , = $954.83 (1 point)
$200,000 @ 4.25% =$983.88

difference in payment is only $29.05
1 point is 1% of the loan size or $2,000
It would take 68 months to break even in this example
Now if 1 point got you a fixed rate of 3.75% this would make sense even though the APR would be considerably higher then the 3.75 you are quoted.. Your payment would be $926.23 and you would pay $57.65 less per month and make back the point you paid in 34 months after which you would be saving $57.65 per month for the life of the loan. If you held the loan for 30 years you would save $20,754 in payments.
1 vote
Antonio Vega…, Agent, Saint Cloud, FL
Sat Oct 15, 2011
4.38% was the average rate for the nation this week on a 30 yr. So 4.5 is a very good number. Remember that advertized rates are for perfect credit scores and unless you are in that situation your rate will be slightly higher.

Tony Vega
Charles Rutenberg Realty
1 vote
Monica Dabney, Home Buyer, 33145
Wed Jun 12, 2013
A bit high in today's market. Should be 3.75% tops.
0 votes
Carlos Escam…, Agent, Miami, FL
Sun Oct 16, 2011
All terms and conditions vary from lenders or financial institutions.
You should contact a Mortgage broker or your bank in order to have accurate number on your GFE.
Web Reference:
0 votes
Lila Lopez, Agent, South Miami, FL
Sat Oct 15, 2011
Good Afternoon Mr. Woodward,

I have looked at the responses you have had, and other than Shane addressing the factors that go into the rates, the answers here have not answered your question as worded. There is a difference between the interest rate on a loan and the APR on a loan. The interest rate on a loan is always lower than the APR. The APR is the yearly cost of the loan, including insurance and the origination fees expressed as a percentage. For the actual interest rate on your loan will be reflected on the note and mortgage. Without knowing the insurance and origination costs, it is difficult to determine what the actual interest rate is on your loan and if it is a good rate or not. You will want to look at the documentation you have been provided.
0 votes
Alejandra M…, Agent, Miami, FL
Sat Oct 15, 2011
Robert Woodard:
Hi Robert, any interest under 5% is great especially 4.5%, the last few days the interest went up, and the inventory and good prices are every day less, so if your intention is to buy do it now, this is the time to buy. Anything you mite need help with, please let me know, I will be glad to work with you
Thank you
0 votes
Albert Tamayo, Agent, MIAMI BEACH, FL
Sat Oct 15, 2011
Absolutely not! The prime lending rate is 3.37 % for a 30 year fixed mortgage and 2.75 %for a 15 year rate. Those rates are phenomenal; hence buyers must take advantage now. Adding the inflationary component to the mix, 4.5 % is still high. Bottom line the banks are making money and thwarting mortgage loans.
0 votes
Yolande Citro, Agent, Miami, FL
Sat Oct 15, 2011
I think it is very good, but there are lower ones out there. Get the opinion of a mortgage broker!
Web Reference:
0 votes
Alma Kee, Agent, Tampa, FL
Sat Oct 15, 2011
Here's a very informative website about "shopping for a mortgage". It also displays the "wholesale" rates that brokers get so if someone is offering you a lower rate, you are probably paying for it with higher "lender related" fees. Also try credit unions, they often have low rates and fees and virtually any credit union will let anyone "join".

You can get a very competitive quote from and excellent service, too.

All the best,
0 votes
Vimy Nesmith…, Agent, Mission Viejo, CA
Fri Oct 14, 2011
30 years @ 4.5 is a really good interest rate. However, I'm closing a deal with my buyers, right now, and they received 3.5 on a 30 year, and the county bought down their purchase price by 38,000. We are very happy with this! Best of luck to you.

Have a happy home,
Web Reference:
0 votes
Richard Bre…, Agent, GREENWICH, CT
Fri Oct 14, 2011
My client in CT just got 3.875% on a 30 year fixed and a $9,000 credit towards closing.
It was a FHA with 3.5% down.

Oct 1st our super conforming loan limit dropped from 709k to 575k so you couldn't borrow more then 575k for this rate.

If you are putting 20% down and have a credit score of 720 you could be around 4.125 or 4.25 for a primary residence.
0 votes
Dan Tabit, Agent, Issaquah, WA
Fri Oct 14, 2011
Shane is correct, there are so many variables it's impossible to say in your given situation. Historically, it is a great rate. Currently some lenders are advertising rates below 4% for a 30 year fixed, but of course when you see or hear of such a rate read the fine print.
0 votes
Rosa Delany, Agent, Miami, FL
Fri Oct 14, 2011
Hello Robert,

Yes, that 4.5 APR is good. Just do a little research. Find out if you are paying points"? Try not to.
Look into for current rate around the country and your area. Call your bank for rate offers.
Look into credit unions they usually offer better rates. You can get loans with great rates for certain occupation; if your a teacher, firefighter, police officer. But most important other factors, credit, size of your loan and your down payment, how long have you been at your job.
Fha are guarantee loans with small downpayments.Also,if you are a first time buyer, you have perks.
How may I help you?
Rosa Delany
0 votes
Tania Ortega, Agent, Coral Gables, FL
Fri Oct 14, 2011
A 4.5% interest rate is excellent. You can also go to other banks and see what interest rate they can offer. But you may end up right about where your at right now. Let me know when your ready to find the perfect home; I would be happy to assist you with that.
0 votes
allan erps,A…, Agent, Pearl River, NY
Fri Oct 14, 2011
Depends on your credit score, type of Mortgage, down payment amount, amount of years on the loan, etc
0 votes
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