Unless you’re fortunate enough to pay for your new home in full right up front, you will need some sort of loan to make your purchase—and having a loan means having to pay back that loan, over time, with interest. However, anybody with a sense of the housing market right now will tell you that interest rates are about as low as they’ve ever been, and that this is the perfect time to purchase or refinance your property.

Interest rates can be complex no matter what they are, and it’s helpful for you to understand that complexity.

To begin, consider the differences between a conventional and a jumbo loan. Simply put, a conventional loan is any loan for $417,000 or less, and a jumbo loan encompasses all loans above that figure. The primary difference between the two is who backs the loan—a conventional loan is backed by Fannie Mae or Freddie Mac, and is therefore easier to obtain than a jumbo loan, which is backed by private banks or investors. The risks inherent in a jumbo loan are therefore more pronounced. This risk drives up the interest rates.

At current, the national average interest rates for a conventional loan are at historic lows for a 30-year fixed-rate mortgage and ARM (adjustable rate mortgage) loans. The ARM’s rate is typically lower specifically because an ARM is designed to last a very short amount of time, and its interest rates will tend to fluctuate along with the market. The jumbo rates for both 30-year fixed mortgages and ARM’s are becoming more and more competitive at nearly a full percentage point lower than they were at this time last year.

Keep in mind, however, that there are numerous factors that go into the calculation of an interest rate, and that no two borrowers are exactly the same. Credit scores, characteristics of the property, the nature of the financing…all of these things and others will raise or lower the final interest rate on your loan. (Credit score, especially, will have a major effect on your interest rate.)

The prime rate issued by the Federal Reserve originally described the interest rate a highly credible borrower could expect—although this is not necessarily the case today. Today, the prime rate may or may not affect interest rates offered by banks or other loan providers; it is not so much a regulating figure as it is a reference figure, to be considered or ignored depending on the individual circumstances of each loan.

Interest rates have hit their all-time low because of the poor state of the economy…and while everybody would rather see the economy rebound, when it does, these low rates will rise back up with them. If you’re in a position to take advantage of these rates, then you absolutely should do so now!

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