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Chicago Home Buyers Have A Shot At A Home-Loan In 2% Range

The bargain-rate mortgage boat is cruising down the Chicago River again, giving would-be home buyers and families seeking to refinance a chance to jump aboard and lock in a loan in a historic low 2% range.

photo by Don Garbarino

On July 29th, the interest rate on benchmark 30-year fixed home loans was 2.80% nationwide, up from 2.78% a week earlier reported Freddie Mac’s Primary Mortgage Market Survey. So, the gangplank for borrowers hoping to lock in a record-low mortgage rate in the mid-2%-range is still in place.

Two weeks ago, the benchmark 30-year loan averaged 2.88%. Only a few weeks ago, borrowers were paying more than 3% for the same loan. A year ago, lenders were charging 2.99% for 30-year fixed mortgages.

Meanwhile, 15-year fixed mortgages hit a record low average of 2.10% nationwide on July 29th, down from 2.12% a week earlier. A year ago, the rate was 2.51%.

The average interest rate on a 30-year fixed mortgage was 3.02% nationwide at the end of June. It quietly slipped to 2.99% on July 1st and has been under 3% for the past five weeks.

“As the economy works to get back to its pre-pandemic self, and the fight against COVID-19 variants unfolds, owners and buyers continue to benefit from some of the lowest mortgage rates of all-time,” said Sam Khater, chief economist at Freddie Mac.

“Largely due to the current environment, the 30-year fixed-rate remained below 3% percent for the fifth consecutive week while the 15-year fixed-rate hit another record low,” Khater said.

On July 28th, the Federal Reserve said it is keeping its benchmark short-term rate pegged at nearly zero, where it has remained since the pandemic tore through the economy in March of 2020.

Analysts said long-term mortgage rates are creeping lower because of falling interest rates on 10-year Treasury notes, which was 1.26% on July 29th. Earlier this summer, the Treasury note yield was 1.5%.

The Freddie Mac survey is focused on conventional, conforming, fully amortizing home-purchase loans for borrowers who place a 20% down payment and has excellent credit.

Record low is 2.66% on 30-year loan

Thirty-year fixed-mortgage interest rates ended 2020 at a rock-bottom 2.66%—the lowest level in the Freddie Mac survey history, which began in 1971. Home-loan rates set new record lows for an amazing 16 times in 2020, and tens of thousands of homeowners refinanced.

“If a home buyer has the best of everything—a 25% down payment and a 740 FICO score, the going rate is 2.75% on a 30-year fixed loan and 2.125% on a 15-year fixed loan,” said Huntington Mortgage broker William Bren. The rates apply to conforming mortgages with a loan amount of up to $548,250.

Under an aggressive loan program involving a pledge of $25,000 in money-market funds at Huntington Bank, North Side borrowers in many Chicago neighborhoods can lower these rates by .125%, Bren said. So, the rate on a 30-year loan could go down to 2.625% and 2% on a 15-year loan.

On July 29th, Gateway Capital Mortgage in Chicago was quoting 2.660% on 30-year loans and 2% on 15-year mortgages with a 3% down payment, reported First Savings Bank of Hegewisch was quoting 2.661% on a 30-year loan and 2.1% on a 15-year loan with 20% down payment.

Mortgage-rate history

Archives of the now-defunct Federal Housing Finance Board show long-term mortgage rates in the 1960s were not much higher than the Great Depression, when lenders were charging 5% on five-year balloon loans.

Nearly six decades ago, between 1963 and 1965 you could get a mortgage at 5.81% to 5.94%. Between 1971 and 1977, the now-defunct Illinois Usury Law held rates in the 7.6%-to-9% range.

In the early 1980s, run-away inflation caused home-loan rates to skyrocket over the moon. According to Freddie Mac, benchmark 30-year mortgage rates peaked at a jaw-dropping 18.45% in October of 1981 during that Great Recession.

Rates finally fell below 10% in April of 1986, and then bounced in the 9%-to-10% range during the balance of the 1980s. Twenty-two years ago—in August of 1999—when some of today’s Millennial borrowers were in diapers, lenders were quoting 8.15% on a 30-year fixed mortgage. Back then, that seemed like a good deal.

For more housing news, visit Don DeBat is co-author of “Escaping Condo Jail,” the ultimate survival guide for condominium living. Visit


“The book is Escaping Condo Jail by Sara Benson and Don DeBat. I would say that anybody thinking about buying a condo, or even anybody serving on a condo board, or anybody who has any connection to a condo, this is must reading—all 600 and something pages. Thanks a lot for a great book!”


Steve Sanders, “Your Money Matters” WGN TV, December 22, 2014

By Don DeBat

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