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Did Mortgage Rates Just Hit Rock Bottom?

I had to rearrange my schedule today. I subscribe to the rate watch at Pentagon Federal and they sent me an email that the 5/5 ARM rate had dropped to 4.0% with no points [1]. And it’s a jumbo!

Are you kidding? Is it April Fool’s Day? Whatever the reason, I had to drop everything and apply for a refinance [2].

I’ve been considering refinancing lately, and I’ve been debating between the Easy Orange mortgage at ING Direct [3] and the Pentagon Federal product. They’re two places that you can get a jumbo mortgage at conforming rates with reasonable closing costs. But there’s no more debate; the rate today at Penfed sealed the deal.

I’ve highlighted in the past the 5/5 ARM and how it’s the perfect ten year mortgage [4] since the break even point for the 5/5 ARM versus a fixed 30 year loan is just after 10 years.

We locked in the 4.0% rate (I didn’t bother with paying any points) and we’ll save $350 each month from our old 5.125% rate. After about $1200 in closing costs we’ll break even in 4 months.

I’m still in shock! I’ve been a subscriber to the rate watch for years, and I don’t ever remember seeing a lower rate. Have we finally hit bottom? I don’t know, but I do know I had to have that rate when I saw it!

Want to shop around and see how the Penfed rates compare? You can get multiple quotes from to see how it stacks up.

Normally, this article wouldn’t go out until tomorrow morning, but I wanted to get it out tonight in case anyone else wants to lock in the rate before the night is over. Who knows what the rates will be in the morning…

Don’t forget, if you are a first time home buyer, you can combine it with the $8,000 First Time Home Buyer Tax Credit [5] for a fantastic deal!