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Americans are finding it pays to go big when borrowing to buy a home.
Wells Fargo and JPMorgan Chase lead banks that are offering jumbo mortgages, those too big for government programs, at rates at or below taxpayer-backed loans. On average, the extra cost of 30-year fixed jumbo loans reached a six-year low of 0.16 percentage point last month, according to HSH.com. Bigger adjustable-rate mortgages with payments that can rise after five years ended last week 0.09 percentage point cheaper, the most since at least 1998.
While rates for conventional mortgages surged last month by the most in two decades, financing costs for million-dollar homes are becoming a relative bargain. Deposit-rich banks needing to make loans are suppressing rates to compete for wealthier customers as home prices soar.