By PHYLLIS ZORN

Staff writer

Historically low mortgage rates are a bright spot in a year of economic meltdowns caused by a pandemic.

Ryan Edmundson, vice president and cashier at Marion National Bank, said interest rates are as low as 2.5% on 15-year loans.

Interest rates on 30-year fixed rate loans are running between 3 and 3.5%, he said.

“This is as low as they’ve been since I’ve been in banking,” Edmundson said.

Over the last several years, he’s seen home mortgage rates run as high as 18%.

“I can’t help but think things don’t get any better than this,” Edmundson said.

The Federal Reserve lowered the prime rate early in the year to help boost the economy because of the COVID-19 epidemic. Before that, interest rates were rising.

Edmundson said some customers have come in to refinance their existing homes so they can save money in the long term and reduce their payments.

“We’ve had some people come in looking to buy houses because rates are so low,” he said. “I’m personally considering refinancing my house.”

One homeowner refinanced a 4.7% mortgage loan. His new rate is 2.75% on a 15-year loan.

On a $100,000 loan, that 2% difference amounts to paying $16,000 less interest over the life of the loan, and the customer’s house payment dropped $100 a month.

“That’s especially helpful for a young couple who have all the initial costs of starting a life,” he said.

Joe Goedert, president of Community National Bank in Burns, said customers today can get a 30-year fixed rate loan for 3.25% interest, depending on their credit rating.

The first home loan Goedert processed in 1983 was a 30-year fixed rate loan at 14% interest.

“A 15-year fixed rate loan, today the person could probably get that just under 3%,” he said.

Goedert said the low interest rate loans are for people buying a house to live in, not landlords buying investment property.

Interest rates dropped a bit in December, but were still about 1% higher than now.

“There was no indication they were going to come down,” he said.

A customer recently refinanced his mortgage loan from 4.75%. His payment went down between $100 and $120 a month, he said.

Goedert is even considering refinancing his own home, although he might pay the same payment and shorten the life of the loan by five years.

“It’s a great time to buy, it’s a great time to refinance,” Goedert said. “With the low rate, they are able to afford more than they would have had.”

Jan Lindsay, mortgage loan officer for Central National Bank, said a $100,000 15-year loan can be refinanced for as little as 2.50% interest, and a 30-year loan for 3.125% with a credit score of 740 or more.

Mortgage loans to purchase a home can be obtained for 2.250% for a 15-year loan or 2.625% for a 20- to 30-year loan.

Federal Housing Authority and Veterans Administration mortgage programs have their own interest rates, she said.

She said there seems to be an increase in customers seeking mortgage loans and refinancing their existing loans.

“It’s cheap money for a great return on an investment,” she said.

Sam Koehn, vice president of Vintage Bank, said the interest rate for a 15-year fixed loan is 2.85% and a 30-year loan is 3.75%.

Vintage Bank offers the same interest rates on new mortgages and refinances, he said.

“Refinances have been really popular,” Koehn said. “I’d definitely say there’s been an increase in demand due to the costs this year.”

Dropping interest rates probably make sense based on everything going on in the world, Koehn said.

“We could see some change after the election,” he said.

Another factor is playing into the scenario.

“It depends on what happens with the coronavirus,” Koehn said. “Any time you see good or bad relating to that, you’re going to see changes. We’d all like to get past it and through it.”