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Since 1971, when mortgage rates first started being tracked, they have ranged from a high of 18.63 percent in the early 80’s to a low of 3.20 percent in late 2013. Currently, rates are still relatively low and for many prospective home buyers, low rates can greatly affect the affordability of a home and the monthly mortgage payment. But, what will the future hold?

“After dropping to all-time lows at the end of 2012, rates have steadily rebounded throughout 2013. Now that the Federal Reserve has announced plans to begin winding down its stimulus program, which has helped keep rates low while the economy was still fragile, we expect rates will rise above 5 percent in 2014 as the economic recovery gains steam. Although those who missed out on mortgages in the 3 percent range may be disappointed that they missed that historic window, rates are still extraordinarily low by historic standards,” says Erin Lantz, director of Zillow Mortgage Marketplace.

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Purchasing a home
If you are looking to purchase a new house this year, now is the time to take advantage of today’s lower rates. For comparison purposes, if mortgage rates rise to 5 percent, that means a monthly payment on a $200,000 loan will rise by roughly $160 a month. Get started >

Refinancing
If your mortgage rate is above 4.5 percent, consider refinancing while rates are still low. It’s important to know that even if you owe more than your home is worth you may be eligible to refinance through government programs like H.A.R.P. Get started >

About the Author

Erin is vice president of mortgages at Zillow. She leads Zillow’s efforts to connect borrowers with lenders, and to empower consumers with the information and tools to make smart decisions about financing homes.

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