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Why I Expect Mortgage Rates to Go Down Sometime Soon

If you thought 2021 was bad, just in general, you might think 2022 is even worse, if the subject happens to be mortgage rates.

They’ve started the year off with a bang, higher, and are now at their highest point in about two years.

A lot of market watchers expected mortgage rates to rise in 2022, but perhaps not this quickly and violently.

For example, the 30-year fixed finished the year 2021 close to 3%, and is now hovering around 3.5%, depending on the loan scenario in question.

It could be even higher than that depending on your FICO score and LTV ratio, and there’s fear things could get even worse.

A Big Jump in Mortgage Rates Is Often Followed by a Correction

Now I don’t want to be a sucker and try to time the market, but I’ve been thinking about this ever since mortgage rates shot up a week or so ago.

It seems like it came out of nowhere, despite the advanced warnings that the Fed would be raising rates this year.

The Fed thing was telegraphed and baked in, but the ongoing story has been inflation, which started off as “transitory” and lately became more concerning and perhaps permanent.

That has forced the Fed to get a bit more aggressive, prompting the dual stock market and bond market carnage we’ve seen lately.

At the same time, most 2022 mortgage rate predictions have called this, though just not this quickly.

There’s also a sense that the worst is behind us with COVID, even if omicron is leading to record numbers in all categories.

I’m hearing a lot of pandemic becomes endemic…emphasis on end.

So Much Bad News Yet Mortgage Interest Rates Are Higher?

mortgage rate trend

While it’s decidedly gloomy out there, here’s why I think mortgage rates might actually get cheaper next month.

If you look at short periods of volatility, they’re usually followed by a correction, whether it’s up or down. This seems to apply to most things, most notably the stock market.

Because mortgage interest rates surged so quickly, there’s a good chance they could fall back to earth for that very reason alone.

Simply put, too much selling makes something oversold and ripe for a purchase, in this case mortgage-backed securities (MBS).

Just look at this 30-year fixed chart from MND, which shows periods of rate spikes, followed by some correcting.

It’s obviously not a perfect science, and still a risk, but I could see rates taking a breather in February. Or perhaps March.

There are other factors working in favor of that argument, like surging COVID cases and hospitalizations.

Yes, we’ve all heard that the omicron variant is “mild,” but somehow daily cases are set to triple the record set a year ago.

And some 132,646 Americans are currently hospitalized with COVID, above the 132,051 record set in January of last year.

While it seems like everyone has COVID, it seems fewer are getting severe disease, despite the hospitalizations.

There’s also a sense that this was expected, seeing that we’ve been through a bad winter already. And there was much more mingling this holiday season.

That could explain why mortgage rates haven’t gone down, but UP. But give it time and things could change direction.

And I think it’d be silly to think there isn’t a next variant on the horizon, even if it’s all media hype.

There’s also that psychology when you think something can’t possibly happen that it does. And right now, it’s hard to imagine mortgage rates improving.

Mortgage Lender Competition to the Rescue?

Lastly, consider mortgage lenders for a moment. While an everyday homeowner or prospective home buyer certainly won’t like a higher mortgage rate, lenders despise them.

A big rate surge like this one will tank their loan volume in a hurry and have them wondering about rightsizing their staff.

It’ll make a cash out refinance less attractive and put a rate and term refinance out of reach for millions of homeowners.

When volume drops, lenders have to get more aggressive pricing-wise to stay afloat. It might mean making less per loan to get the loan to begin with!

And as I’ve written about before, it can be wise to apply for a home loan when it’s not busy.

Not just because your loan will get to the finish line faster, but because it should be cheaper, relatively speaking.

Why? Because the lender is willing to shrink their profit margin to get your business. When they’re slammed, they’ll maybe even ignore you.

So if it feels like all hope is lost on the mortgage rate front, it probably isn’t, for that reason alone.

When things turn around is another question. Does it happen in the next week or two, in February, or in March? Do things get worse before they get better?

I’m not sure, but I do think we could see a reprieve before the traditional home buying season gets underway in later March and April.

It might be short-lived though, so be ready to pounce if and when it happens.

Read more: What time of year are mortgage rates lowest?

Source: thetruthaboutmortgage.com

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Mortgage Rates vs. Omicron

Last week, the World Health Organization (WHO) designated Omicron, formally known as B.1.1.529, a variant of concern. This news rocked financial markets nationwide amid concerns of another series of lockdowns, travel restrictions, and so on. In short, there’s renewed fear that we’re not out of the woods on COVID, as some seemed to think prior… Read More »Mortgage Rates vs. Omicron

The post Mortgage Rates vs. Omicron appeared first on The Truth About Mortgage.

Source: thetruthaboutmortgage.com

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Mortgage Rates vs. Home Prices: Is There Really an Inverse Relationship Between Them?

Mortgage Q&A: “Mortgage rates vs. home prices.” Today, we’ll take a look at the impact of both home prices and mortgage rates on your decision to buy a piece of property, along with the relationship they share. Obviously, both are very important not only in terms of whether you should buy (from an investment standpoint),… Read More »Mortgage Rates vs. Home Prices: Is There Really an Inverse Relationship Between Them?

The post Mortgage Rates vs. Home Prices: Is There Really an Inverse Relationship Between Them? appeared first on The Truth About Mortgage.

Source: thetruthaboutmortgage.com

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Dude, Where’s My Low Mortgage Rate?

A Common Mortgage Rate Tale

You’ve been shopping mortgage rates and finally found a lender you like. The loan officer asks if you want to lock in your rate and you say huh?

They explain that you can lock in your interest rate today so it won’t change, or you can float and take your chances on rates going even lower before you close.

You decide you don’t want to lock just yet because rates just seem to be moving lower and lower.

Then you wake up to stock rally after stock rally, which puts you in a good mood because your stocks are making you rich, at least on paper.

You decide it’s time to lock and call your lender to dial in that 2.75% rate on the 30-year fixed you were quoted last week.

No sense in taking any chances, right? It’s probably best not to get greedy and just go with a rate of 2.75% you can enjoy until the year 2051!

It’s a very low rate and dreams of a sub-2% 30-year fixed-rate mortgage are probably just dreams and nothing more.

Here Comes the Not Good Surprise

The loan officer picks up the phone and you tell her you want to move ahead with what was quoted last Thursday.

Well guess what? Your low rate isn’t so low anymore. Yep. Rates went up since last week and because you chose not to lock, you’re now stuck with a higher rate.

No, the lender isn’t pulling a bait and switch, they aren’t playing any games. It’s just how it works. Much like stocks and other securities, mortgage rates fluctuate daily with the market.

You can’t buy Tesla stock today at last week’s price because you saw a ticker quote and liked it. You’re at the mercy of whatever it’s going for now.

Like stocks, mortgage rates can move up, down, or sideways on any given day. And when markets are active you better believe your unlocked mortgage rate will be too.

For much of 2021, we’ve seen mortgage rates trend lower until the last few days, when the Fed indicated a willingness to taper its purchases of mortgage-backed securities (MBS).

That sent the bellwether 10-year bond yield up about .25% from 1.30 to 1.55, which is generally bad news for long-term fixed mortgage rates.

As a result, mortgage interest rates have indeed been rising. Unfortunately, not many folks like rising rates.

Those who locked last week are probably pretty happy seeing that they’ve now got what appears to be a below-market rate.

Conversely, the folks who speculated (yes, you’re a speculator if you float your rate) are kicking themselves for looking a gift horse in the mouth.

It’s Not Too Late to Get That Low Mortgage Rate

But before we get all panic stations, let’s calm down.

It’s not too late to get the originally quoted rate, or even better. Just because mortgage rates are higher today doesn’t mean they won’t be lower tomorrow or the next day.

That’s the beauty of mortgage rates. Ultimately, they can rise and fall, just like the stock market. And if you happen to time the market right you can cash in with a lower rate.

While there was some uncertainty about when the Fed would slow its MBS purchases, the writing was mostly on the wall.

And there are still catalysts out there that could send mortgage rates the other way, like COVID. We are about to enter fall and winter…

Oh, and the Evergrande debt crisis in China rattled global markets just a week ago, before settling down. But could there be more to come?

There’s also another looming debt ceiling and potential government shutdown to worry about.

Negative economic events (and societal ones) have the ability to push rates lower, and there are lots of possibilities on the table.

That could mean a return to those lower rates you may have been quoted last week.

It Might Take a While for Rates to Settle Down Again

The frustrating thing is mortgage rates often take longer to drop than they do to rise, like the prices of most things.

Lenders seem happy to increase them if the economy is looking up, but are cautious in lowering them in case they get caught out by another bit of unexpected news.

That means the recent damage could take time to unwind. And you might not have time depending on your closing date.

There’s also a chance rates will continue to rise as more positive economic news surfaces. So today’s rates may not look too bad (in hindsight) if rates are even higher next week.

And you don’t want to get stuck playing the waiting game as your closing day inches nearer and nearer.

While you could have locked in 2.75% last week, and 3% today, it’s still better than 3.5% tomorrow.

Read more: 6 Ways to Snag a Low Mortgage Rate Even If They Suddenly Jump Higher

Source: thetruthaboutmortgage.com

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30-Year Fixed Mortgage Rate Returns to Record Low

As of September 15, the rate borrowers were quoted on Zillow for 30-year fixed mortgages was 2.67%.

Abstract illustration of houses and charts

As of September 15, the rate borrowers were quoted on Zillow for 30-year fixed mortgages was 2.67%.

Mortgage rates remain flat, but upward movements may be on the horizon.

“Mortgage rates moved slightly lower this week, barely budging as markets await a signal for a more pronounced move in either direction,” said Zillow Senior Economist Matthew Speakman. “Rates have stayed basically flat over the past few weeks, and where they head from here is dependent on two key factors: COVID-19 cases and potential actions taken by the Federal Reserve. While COVID cases remain elevated, they are showing some early signs of plateauing – news that is undoubtedly good for the world, but could place more upward pressure on mortgage rates. The Fed, meanwhile, continues to wrestle with whether, how, and when to tighten monetary policy at a time when inflation and joblessness remain elevated. A softer-than-expected August inflation reading this week likely lowered the odds that the Fed announces any immediate moves to tighten policy at their upcoming September conference, but the fact that interest rates haven’t moved much in recent weeks indicates that investors are still waiting for more certainty. All told, there’s a good chance that mortgage rates will move notably in the coming weeks, but the jury’s still out on which direction they’ll head.”

Additionally, the 15-year fixed mortgage rate was 1.99%, and for 5/1 ARMs, the rate was 2.34%.

Check Zillow for mortgage rate trends and up-to-the-minute mortgage rates for your state, or use the mortgage calculator to calculate monthly payments at the current rates.

The weekly mortgage rate chart above illustrates the average 30-year fixed interest rate for the past week. Here’s a comprehensive look at the current mortgage rates for all loan types:

Today’s Average Rates for Conventional Loans

Program Interest Rate APR 1 Wk Change
30-Year Fixed 2.84% 2.9% -0.07%
20-Year Fixed 2.54% 2.62% 0%
15-Year Fixed 2.06% 2.16% -0.02%
10-Year Fixed 2.06% 2.19% -0.06%
7/1 ARM 2.4% 3.06% 0.04%
5/1 ARM 2.35% 3.18% 0.01%
3/1 ARM 0% 0% 0%

A 30-Year Fixed loan of $300,000 at 2.84% APR with a $75,000 down payment will have a monthly payment of $1,239. A 20-Year Fixed loan of $300,000 at 2.54% APR with a $75,000 down payment will have a monthly payment of $1,595. A 15-Year Fixed loan of $300,000 at 2.06% APR with a $75,000 down payment will have a monthly payment of $1,939. A 10-Year Fixed loan of $300,000 at 2.06% APR with a $75,000 down payment will have a monthly payment of $2,768. A 7/1 ARM loan of $300,000 at 2.4% APR with a $75,000 down payment will have a monthly payment of $1,169. A 5/1 ARM loan of $300,000 at 2.35% APR with a $75,000 down payment will have a monthly payment of $1,162. A 3/1 ARM loan of $0 at 0% APR with a $0 down payment will have a monthly payment of $0. All monthly payments displayed assume a maximum Loan to Value (LTV) of 80% and 740 credit score, and do not include amount for taxes and insurance. The actual monthly payment may be greater.

Today’s Average Rates for Government Loans

Program Interest Rate APR 1 Wk Change
30-Year Fixed FHA 2.25% 2.9% 0.05%
30-Year Fixed VA 2.48% 2.74% -0.02%
15-Year Fixed FHA 1.75% 2.41% 0.22%
15-Year Fixed VA 1.89% 2.35% 0.45%
5/1 ARM FHA 3.11% 3.27% 0.08%
5/1 ARM VA 2.44% 2.41% 0.07%

A 30-Year Fixed FHA loan of $300,000 at 2.25% APR with a $75,000 down payment will have a monthly payment of $1,146. A 30-Year Fixed VA loan of $300,000 at 2.48% APR with a $75,000 down payment will have a monthly payment of $1,181. A 15-Year Fixed FHA loan of $300,000 at 1.75% APR with a $75,000 down payment will have a monthly payment of $1,896. A 15-Year Fixed VA loan of $300,000 at 1.89% APR with a $75,000 down payment will have a monthly payment of $1,915. A 5/1 ARM FHA loan of $300,000 at 3.11% APR with a $75,000 down payment will have a monthly payment of $1,282. A 5/1 ARM VA loan of $300,000 at 2.44% APR with a $75,000 down payment will have a monthly payment of $1,176. All monthly payments displayed assume a maximum Loan to Value (LTV) of 80% and 740 credit score, and do not include amount for taxes and insurance. The actual monthly payment may be greater.

Today’s Average Rates for Jumbo Loans

Program Interest Rate APR 1 Wk Change
30-Year Fixed Jumbo 2.87% 2.91% 0.03%
20-Year Fixed Jumbo 3.14% 3.19% -0.05%
15-Year Fixed Jumbo 2.6% 2.68% 0.03%
10-Year Fixed Jumbo 2.78% 2.93% 0%
7/1 ARM Jumbo 2.43% 3.06% -0.02%
5/1 ARM Jumbo 2.24% 3.12% 0.05%
3/1 ARM Jumbo 0% 0% 0%

A 30-Year Fixed Jumbo loan of $600,000 at 2.87% APR with a $150,000 down payment will have a monthly payment of $2,486. A 20-Year Fixed Jumbo loan of $600,000 at 3.14% APR with a $150,000 down payment will have a monthly payment of $3,370. A 15-Year Fixed Jumbo loan of $600,000 at 2.6% APR with a $150,000 down payment will have a monthly payment of $4,027. A 10-Year Fixed Jumbo loan of $600,000 at 2.78% APR with a $150,000 down payment will have a monthly payment of $5,733. A 7/1 ARM Jumbo loan of $600,000 at 2.43% APR with a $150,000 down payment will have a monthly payment of $2,347. A 5/1 ARM Jumbo loan of $600,000 at 2.24% APR with a $150,000 down payment will have a monthly payment of $2,291. A 3/1 ARM Jumbo loan of $0 at 0% APR with a $0 down payment will have a monthly payment of $0. All monthly payments displayed assume a maximum Loan to Value (LTV) of 80% and 740 credit score, and do not include amount for taxes and insurance. The actual monthly payment may be greater.

Source: zillow.com

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Why It Could Be a Great Summer for Mortgage Rates

It’s looking like it could be a really good summer for mortgage rates, after a very uncertain spring made it appear as if the best we had seen was gone forever.

Now this isn’t to say that mortgage rates will hit all-time record lows again, but the fact that they’re slipping back to those levels, even as inflation concerns grow, is a positive.

Mortgage Rates Ebb and Flow Throughout the Year

  • The 30-year fixed has fallen back below 3% and is currently averaging 2.96% per Freddie Mac
  • It was as high as 3.18% in early April when it appeared the best levels were a thing of the past
  • Now we seem to be enjoying a low-rate trend that could get even better as summer progresses
  • There are often periods of strength and weakness with mortgage rates (aka opportunities for borrowers)

If you watch mortgage rates for long enough, you’ll notice that they ebb and flow, just like stocks or other investments.

This is because the mortgage-backed securities (MBS) that drive these prices are actual investments for the traders who purchase and sell them.

There are periods of strength and weakness, which often last weeks or even months, where it seems they either have nowhere to go but up or down.

It can be emotional and psychological, similar to the stock market where traders rush to close their positions after a bad week , only to panic and buy back in as prices rise again.

When we compare that to mortgage rates, it could be the homeowner who locks their rate after a period of rising rates, only to find that the trend reverses.

Of course, it’s very difficult to time the market, so I don’t fault anyone trying to determine that right time to lock it in, or alternatively float for an even better rate.

The point is that often when all hope is lost, there’s a reversal, which seems to come out of nowhere.

That appears to be the case over the past couple weeks, with the 30-year fixed now averaging 2.96% per Freddie Mac, basically its lowest point since February.

If all goes well, we could see it fall back to those early 2021 levels, where it was as low as 2.65% in January.

Mortgage Lenders Are Going to Get Aggressive as Business Slows

  • The traditional home buying season is now coming to a close as summer begins
  • For mortgage lenders coming off record quarters this means severely reduced loan volume
  • Fewer home purchase loans and dwindling refinances could force them to lower their interest rates to drum up business
  • This means they’ll pass more savings onto consumers while reducing their own margins

While the technicals underpinning mortgage rates have been improving for a few weeks now (10-year bond yield back at its lowest point since March), another seasonal dynamic might be working in our favor.

As we approach summer, everyone slows down, gets fatigued, and goes on vacation. Most businesses don’t look forward to this time of year unless they’re in the tourism industry.

This is especially true of real estate and mortgage, as both tend to peak in spring during the traditional home buying season, before grinding to a halt in the warmer months.

Knowing this, mortgage lenders will be forced to get more competitive if they want to keep volume up, an especially difficult task given their record business in the first quarter of 2021.

Ultimately, it’s going to be very tricky for them to keep up the momentum, especially since most homeowners already refinanced, and home sales are being held back by a major lack of inventory.

So what is a lender to do? Well, lower their mortgage rates obviously!

They’ve got profit margins they can play with, and instead of making a ton of money per loan, they can sacrifice some to keep the business coming in.

This might even be more pronounced than usual because lenders have been busier than ever, which allowed them to keep rates artificially inflated.

We Are Entering the Historically Better Time of Year for Mortgage Rates

  • Mortgage rates tend to be highest in April when consumer demand for home loans is strongest
  • Lenders are often busiest during this time of year and charge a premium as a result
  • Once their business slows down they’re essentially forced to become more competitive
  • Rates usually drop as summer progresses and are cheapest in winter

After some research, I discovered that mortgage rates are highest in April, then tend to cruise lower throughout the second half of the year.

While they seem to be cheapest in winter, specifically the month of December, they get pretty low around late summer and early fall too.

This is yet another reason why the best time to buy a home is in August/September.

Anyway, if this trend holds in 2021, we could see the 30-year fixed fall back to those record low levels seen in January.

As noted, we might see even more improvement than in other years due to a major slowdown in business, which should force lenders to compete more aggressively than usual.

For example, United Wholesale Mortgage, the nation’s largest wholesale mortgage lender, recently announced a price match through the month of June.

This tells me they’re doing their best to pick up the expected slack and other lenders will likely follow suit, including the retail banks.

For borrowers, this is great news. If you missed your chance to refinance, or were on the fence about it, you might get a good opportunity this summer or later in the year.

And those who have yet to purchase a home might be able to offset the sky-high price tag with an ultra-low mortgage rate again.

Of course, low rates might be a bit of a double-edged sword for home buyers as they just stoke the flames of an already red-hot housing market.

Read more: 2021 Mortgage Rate Predictions

(photo: Michael Frascella)

Source: thetruthaboutmortgage.com

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Jim Cramer Thinks the Super Low Mortgage Rates Are Going Bye Bye

The other day, Jim Cramer was talking mortgage rates, even though he’s a self-described “stock person.”

The backdrop was the better than expected jobs report, which jolted the bond market and sent mortgage rates higher.

In short, more jobs and less unemployment equates to a recovering economy, which ushers in inflation and forces the Fed to act (aka raise rates). Mortgage rates typically follow.

Cramer’s main message to The Street’s Jeff Marks was that banks are probably going to start increasing rates, and if you don’t have a cheap mortgage, you better get one fast.

Cramer Believes You Need to Act Now on Mortgage Rates

If you’re not currently the owner of a super cheap mortgage, you better get going on that. At least, that’s what Jim seems to think.

He told The Street that, “I feel strongly that this is it, the train’s leaving the station on mortgage rates.”

In other words, this ultra-low rate environment we’ve all been enjoying could be wrapping up sooner rather than later. And not returning anytime soon, or ever.

Cramer even went as far as to say that if you don’t have a mortgage at all, but own free-and-clear property, you should take out a mortgage.

What! Take on more debt just for the fun of it, while everyone else is rushing to pay off the mortgage early? More on that in a moment.

With regard to his call that the low mortgage rates are gone forever, I’m not so sure.

As I mentioned in an earlier post, I think there are still a lot of lingering issues both for the economy and COVID.

I don’t expect this fall to be a walk in the park, and thus I expect mortgage rates to stay low longer than expected.

That isn’t to say you should sit and wait for better, but you might have a bit more time than Cramer thinks. But it seems COVID is calling the shots, not inflation.

He Just Took Out a 20-Year Fixed Mortgage on a Property He Owned Free and Clear

Now back to Cramer’s message about taking out a mortgage even if your home is completely paid off.

It might sound crazy, but his logic is pretty sound here – borrowing against your home is very attractive at the moment because interest rates are hovering around record lows.

The man isn’t just telling you to go do it, he actually put his money where his mouth is and took out a new home loan himself.

Apparently, he owned a property free and clear and decided to borrow against it, using a 20-year fixed set at a low 3.25%.

That’s actually not that impressive to be honest, though if it’s an investment property then it’s a slightly different story.

Anyway, his point is that you can lock in a really low interest rate for the next 20 or 30 years and invest your money in the higher-yielding stock market.

He threw out PepsiCo stock as an example, figuring it would beat the 3.25% annual rate of return on his mortgage.

For the record, it’s returned something like 12% annually for the past decade, though the Nasdaq has performed even better.

Regardless, I mostly agree with this philosophy, though I don’t know if I’d go as far as to recommend taking out a new mortgage if you don’t have one.

Simply put, you get to borrow cheap money and invest it for much higher returns in the stock market, hopefully.

You just have to be disciplined and actually do that, as opposed to taking out a mortgage (cash out refinance), thinking you’re rich, and buying a Tesla with the proceeds.

One last funny fact to put a bow on this. It was only four months ago that Cramer paid off his mortgage with bitcoin gains.

So he paid off a mortgage and months later took out a new one.

(photo: Phil Leitch)

Source: thetruthaboutmortgage.com

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30-Year Fixed Mortgage Rate Hits Yet Another Record Low, Falls Below 3.2 Percent for the First Time

As of May 5, the rate borrowers were quoted on Zillow for 30-year fixed mortgages was 2.72%.

Abstract illustration of houses and charts

As of May 5, the rate borrowers were quoted on Zillow for 30-year fixed mortgages was 2.72%.

Mortgage rates fall to lowest levels in months.

“Mortgage rates fell slightly again this week, pushing rates to their lowest level since mid-to-late February,” said Zillow Economist Matthew Speakman. “With few surprising economic data or pandemic-related developments this week, mortgage rates and the bond yields that tend to influence them saw little reason to move significantly over the past seven days. Unlike stocks, bonds and mortgage rates brushed aside comments made by Treasury Secretary Janet Yellen, in which she suggested (but did not recommend) that interest rates will likely have to rise somewhat in order to ensure that the economy doesn’t overheat. But this period of relative calm will be put to the test in the coming days. April employment figures and inflation data, two key gauges of the economy’s path forward, are due this week, and stronger-than-expected readings of either – or both – reports will likely revert mortgage rates back upward.”

Additionally, the 15-year fixed mortgage rate was 2.09%, and for 5/1 ARMs, the rate was 2.38%.

Check Zillow for mortgage rate trends and up-to-the-minute mortgage rates for your state, or use the mortgage calculator to calculate monthly payments at the current rates.

The weekly mortgage rate chart above illustrates the average 30-year fixed interest rate for the past week. Here’s a comprehensive look at the current mortgage rates for all loan types:

Today’s Average Rates for Conventional Loans

Program Interest Rate APR 1 Wk Change
30-Year Fixed 2.77% 2.82% 0.11%
20-Year Fixed 2.63% 2.71% 0.06%
15-Year Fixed 2.09% 2.17% 0.03%
10-Year Fixed 2.03% 2.15% -0.08%
7/1 ARM 2.22% 2.92% 0.26%
5/1 ARM 2.19% 3.04% 0.21%
3/1 ARM 0% 0% 0%

A 30-Year Fixed loan of $300,000 at 2.77% APR with a $75,000 down payment will have a monthly payment of $1,227. A 20-Year Fixed loan of $300,000 at 2.63% APR with a $75,000 down payment will have a monthly payment of $1,609. A 15-Year Fixed loan of $300,000 at 2.09% APR with a $75,000 down payment will have a monthly payment of $1,942. A 10-Year Fixed loan of $300,000 at 2.03% APR with a $75,000 down payment will have a monthly payment of $2,764. A 7/1 ARM loan of $300,000 at 2.22% APR with a $75,000 down payment will have a monthly payment of $1,141. A 5/1 ARM loan of $300,000 at 2.19% APR with a $75,000 down payment will have a monthly payment of $1,137. A 3/1 ARM loan of $0 at 0% APR with a $0 down payment will have a monthly payment of $0. All monthly payments displayed assume a maximum Loan to Value (LTV) of 80% and 740 credit score, and do not include amount for taxes and insurance. The actual monthly payment may be greater.

Today’s Average Rates for Government Loans

Program Interest Rate APR 1 Wk Change
30-Year Fixed FHA 2.4% 3.07% 0.17%
30-Year Fixed VA 2.47% 2.73% 0.12%
15-Year Fixed FHA 2.23% 2.93% 0.09%
15-Year Fixed VA 2.42% 2.89% 0.17%
5/1 ARM FHA 2.59% 2.97% 0.02%
5/1 ARM VA 3.17% 2.83% -0.27%

A 30-Year Fixed FHA loan of $300,000 at 2.4% APR with a $75,000 down payment will have a monthly payment of $1,170. A 30-Year Fixed VA loan of $300,000 at 2.47% APR with a $75,000 down payment will have a monthly payment of $1,180. A 15-Year Fixed FHA loan of $300,000 at 2.23% APR with a $75,000 down payment will have a monthly payment of $1,962. A 15-Year Fixed VA loan of $300,000 at 2.42% APR with a $75,000 down payment will have a monthly payment of $1,988. A 5/1 ARM FHA loan of $300,000 at 2.59% APR with a $75,000 down payment will have a monthly payment of $1,200. A 5/1 ARM VA loan of $300,000 at 3.17% APR with a $75,000 down payment will have a monthly payment of $1,291. All monthly payments displayed assume a maximum Loan to Value (LTV) of 80% and 740 credit score, and do not include amount for taxes and insurance. The actual monthly payment may be greater.

Today’s Average Rates for Jumbo Loans

Program Interest Rate APR 1 Wk Change
30-Year Fixed Jumbo 3.2% 3.25% 0.09%
20-Year Fixed Jumbo 3.28% 3.32% 0.25%
15-Year Fixed Jumbo 2.81% 2.89% 0.11%
10-Year Fixed Jumbo 2.5% 2.6% 0.1%
7/1 ARM Jumbo 2.68% 3.17% -0.35%
5/1 ARM Jumbo 2.75% 3.21% -0.25%
3/1 ARM Jumbo 2.14% 2.74% 0%

A 30-Year Fixed Jumbo loan of $600,000 at 3.2% APR with a $150,000 down payment will have a monthly payment of $2,595. A 20-Year Fixed Jumbo loan of $600,000 at 3.28% APR with a $150,000 down payment will have a monthly payment of $3,411. A 15-Year Fixed Jumbo loan of $600,000 at 2.81% APR with a $150,000 down payment will have a monthly payment of $4,089. A 10-Year Fixed Jumbo loan of $600,000 at 2.5% APR with a $150,000 down payment will have a monthly payment of $5,656. A 7/1 ARM Jumbo loan of $600,000 at 2.68% APR with a $150,000 down payment will have a monthly payment of $2,428. A 5/1 ARM Jumbo loan of $600,000 at 2.75% APR with a $150,000 down payment will have a monthly payment of $2,449. A 3/1 ARM Jumbo loan of $600,000 at 2.14% APR with a $150,000 down payment will have a monthly payment of $2,259. All monthly payments displayed assume a maximum Loan to Value (LTV) of 80% and 740 credit score, and do not include amount for taxes and insurance. The actual monthly payment may be greater.

Source: zillow.com

Posted on

30-Year Fixed Mortgage Rate Holds Steady

As of May 5, the rate borrowers were quoted on Zillow for 30-year fixed mortgages was 2.72%.

Abstract illustration of houses and charts

As of May 5, the rate borrowers were quoted on Zillow for 30-year fixed mortgages was 2.72%.

Mortgage rates fall to lowest levels in months.

“Mortgage rates fell slightly again this week, pushing rates to their lowest level since mid-to-late February,” said Zillow Economist Matthew Speakman. “With few surprising economic data or pandemic-related developments this week, mortgage rates and the bond yields that tend to influence them saw little reason to move significantly over the past seven days. Unlike stocks, bonds and mortgage rates brushed aside comments made by Treasury Secretary Janet Yellen, in which she suggested (but did not recommend) that interest rates will likely have to rise somewhat in order to ensure that the economy doesn’t overheat. But this period of relative calm will be put to the test in the coming days. April employment figures and inflation data, two key gauges of the economy’s path forward, are due this week, and stronger-than-expected readings of either – or both – reports will likely revert mortgage rates back upward.”

Additionally, the 15-year fixed mortgage rate was 2.09%, and for 5/1 ARMs, the rate was 2.38%.

Check Zillow for mortgage rate trends and up-to-the-minute mortgage rates for your state, or use the mortgage calculator to calculate monthly payments at the current rates.

The weekly mortgage rate chart above illustrates the average 30-year fixed interest rate for the past week. Here’s a comprehensive look at the current mortgage rates for all loan types:

Today’s Average Rates for Conventional Loans

Program Interest Rate APR 1 Wk Change
30-Year Fixed 2.79% 2.84% 0.09%
20-Year Fixed 2.66% 2.73% 0.04%
15-Year Fixed 2.1% 2.19% 0.02%
10-Year Fixed 2.03% 2.15% -0.08%
7/1 ARM 2.24% 2.94% 0.24%
5/1 ARM 2.27% 3.08% 0.17%
3/1 ARM 0% 0% 0%

A 30-Year Fixed loan of $300,000 at 2.79% APR with a $75,000 down payment will have a monthly payment of $1,231. A 20-Year Fixed loan of $300,000 at 2.66% APR with a $75,000 down payment will have a monthly payment of $1,612. A 15-Year Fixed loan of $300,000 at 2.1% APR with a $75,000 down payment will have a monthly payment of $1,944. A 10-Year Fixed loan of $300,000 at 2.03% APR with a $75,000 down payment will have a monthly payment of $2,764. A 7/1 ARM loan of $300,000 at 2.24% APR with a $75,000 down payment will have a monthly payment of $1,144. A 5/1 ARM loan of $300,000 at 2.27% APR with a $75,000 down payment will have a monthly payment of $1,149. A 3/1 ARM loan of $0 at 0% APR with a $0 down payment will have a monthly payment of $0. All monthly payments displayed assume a maximum Loan to Value (LTV) of 80% and 740 credit score, and do not include amount for taxes and insurance. The actual monthly payment may be greater.

Today’s Average Rates for Government Loans

Program Interest Rate APR 1 Wk Change
30-Year Fixed FHA 2.41% 3.07% 0.16%
30-Year Fixed VA 2.49% 2.75% 0.1%
15-Year Fixed FHA 2.23% 2.94% 0.08%
15-Year Fixed VA 2.42% 2.89% 0.17%
5/1 ARM FHA 2.59% 2.97% 0.02%
5/1 ARM VA 3.09% 2.77% -0.22%

A 30-Year Fixed FHA loan of $300,000 at 2.41% APR with a $75,000 down payment will have a monthly payment of $1,170. A 30-Year Fixed VA loan of $300,000 at 2.49% APR with a $75,000 down payment will have a monthly payment of $1,183. A 15-Year Fixed FHA loan of $300,000 at 2.23% APR with a $75,000 down payment will have a monthly payment of $1,962. A 15-Year Fixed VA loan of $300,000 at 2.42% APR with a $75,000 down payment will have a monthly payment of $1,989. A 5/1 ARM FHA loan of $300,000 at 2.59% APR with a $75,000 down payment will have a monthly payment of $1,200. A 5/1 ARM VA loan of $300,000 at 3.09% APR with a $75,000 down payment will have a monthly payment of $1,279. All monthly payments displayed assume a maximum Loan to Value (LTV) of 80% and 740 credit score, and do not include amount for taxes and insurance. The actual monthly payment may be greater.

Today’s Average Rates for Jumbo Loans

Program Interest Rate APR 1 Wk Change
30-Year Fixed Jumbo 3.24% 3.28% 0.06%
20-Year Fixed Jumbo 3.3% 3.34% 0.23%
15-Year Fixed Jumbo 2.83% 2.9% 0.09%
10-Year Fixed Jumbo 2.5% 2.6% 0.1%
7/1 ARM Jumbo 2.65% 3.1% -0.28%
5/1 ARM Jumbo 2.66% 3.15% -0.18%
3/1 ARM Jumbo 2.14% 2.74% 0%

A 30-Year Fixed Jumbo loan of $600,000 at 3.24% APR with a $150,000 down payment will have a monthly payment of $2,606. A 20-Year Fixed Jumbo loan of $600,000 at 3.3% APR with a $150,000 down payment will have a monthly payment of $3,416. A 15-Year Fixed Jumbo loan of $600,000 at 2.83% APR with a $150,000 down payment will have a monthly payment of $4,093. A 10-Year Fixed Jumbo loan of $600,000 at 2.5% APR with a $150,000 down payment will have a monthly payment of $5,656. A 7/1 ARM Jumbo loan of $600,000 at 2.65% APR with a $150,000 down payment will have a monthly payment of $2,418. A 5/1 ARM Jumbo loan of $600,000 at 2.66% APR with a $150,000 down payment will have a monthly payment of $2,420. A 3/1 ARM Jumbo loan of $600,000 at 2.14% APR with a $150,000 down payment will have a monthly payment of $2,259. All monthly payments displayed assume a maximum Loan to Value (LTV) of 80% and 740 credit score, and do not include amount for taxes and insurance. The actual monthly payment may be greater.

Source: zillow.com

Posted on

30-Year Fixed Mortgage Rate Hovers Above All-Time Low

As of April 28, the rate borrowers were quoted on Zillow for 30-year fixed mortgages was 2.78%.

Abstract illustration of houses and charts

As of April 28, the rate borrowers were quoted on Zillow for 30-year fixed mortgages was 2.78%.

Mortgage rates fall despite strong economic data reports.

“Mortgage rates fell again this week, continuing the downward trend they’ve exhibited for most of April,” said Zillow Economist Matthew Speakman. “In what was a relatively unremarkable week for mortgage rates, the modest movement was partially driven by discussions about a proposed increase in capital gains tax rates – which placed downward pressure on bond yields and thus rates – and anticipation of a key announcement by the Federal Reserve. Fed Chair Jerome Powell reiterated on Wednesday that the Central Bank has no immediate plans to increase interest rates or curb the purchases of mortgage-backed securities – a position that placed more downward pressure on bond yields and is likely to result in more mortgage decreases in the coming days. Looking ahead, with a slew of key economic reports on the horizon – including consumer spending and inflation data – the relatively muted mortgage rate activity from the past couple weeks may transition to more significant movements.”

Additionally, the 15-year fixed mortgage rate was 2.11%, and for 5/1 ARMs, the rate was 2.55%.

Check Zillow for mortgage rate trends and up-to-the-minute mortgage rates for your state, or use the mortgage calculator to calculate monthly payments at the current rates.

The weekly mortgage rate chart above illustrates the average 30-year fixed interest rate for the past week. Here’s a comprehensive look at the current mortgage rates for all loan types:

Today’s Average Rates for Conventional Loans

Program Interest Rate APR 1 Wk Change
30-Year Fixed 2.8% 2.85% 0.08%
20-Year Fixed 2.66% 2.73% 0.03%
15-Year Fixed 2.1% 2.19% 0.02%
10-Year Fixed 2.01% 2.15% -0.08%
7/1 ARM 2.28% 2.96% 0.22%
5/1 ARM 2.34% 3.1% 0.15%
3/1 ARM 0% 0% 0%

A 30-Year Fixed loan of $300,000 at 2.8% APR with a $75,000 down payment will have a monthly payment of $1,232. A 20-Year Fixed loan of $300,000 at 2.66% APR with a $75,000 down payment will have a monthly payment of $1,613. A 15-Year Fixed loan of $300,000 at 2.1% APR with a $75,000 down payment will have a monthly payment of $1,944. A 10-Year Fixed loan of $300,000 at 2.01% APR with a $75,000 down payment will have a monthly payment of $2,762. A 7/1 ARM loan of $300,000 at 2.28% APR with a $75,000 down payment will have a monthly payment of $1,151. A 5/1 ARM loan of $300,000 at 2.34% APR with a $75,000 down payment will have a monthly payment of $1,159. A 3/1 ARM loan of $0 at 0% APR with a $0 down payment will have a monthly payment of $0. All monthly payments displayed assume a maximum Loan to Value (LTV) of 80% and 740 credit score, and do not include amount for taxes and insurance. The actual monthly payment may be greater.

Today’s Average Rates for Government Loans

Program Interest Rate APR 1 Wk Change
30-Year Fixed FHA 2.33% 2.99% 0.24%
30-Year Fixed VA 2.54% 2.81% 0.05%
15-Year Fixed FHA 2.11% 2.85% 0.17%
15-Year Fixed VA 2.53% 3.02% 0.04%
5/1 ARM FHA 2.6% 2.97% 0.02%
5/1 ARM VA 3.06% 2.75% -0.19%

A 30-Year Fixed FHA loan of $300,000 at 2.33% APR with a $75,000 down payment will have a monthly payment of $1,159. A 30-Year Fixed VA loan of $300,000 at 2.54% APR with a $75,000 down payment will have a monthly payment of $1,191. A 15-Year Fixed FHA loan of $300,000 at 2.11% APR with a $75,000 down payment will have a monthly payment of $1,946. A 15-Year Fixed VA loan of $300,000 at 2.53% APR with a $75,000 down payment will have a monthly payment of $2,004. A 5/1 ARM FHA loan of $300,000 at 2.6% APR with a $75,000 down payment will have a monthly payment of $1,200. A 5/1 ARM VA loan of $300,000 at 3.06% APR with a $75,000 down payment will have a monthly payment of $1,273. All monthly payments displayed assume a maximum Loan to Value (LTV) of 80% and 740 credit score, and do not include amount for taxes and insurance. The actual monthly payment may be greater.

Today’s Average Rates for Jumbo Loans

Program Interest Rate APR 1 Wk Change
30-Year Fixed Jumbo 3.22% 3.27% 0.07%
20-Year Fixed Jumbo 3.29% 3.33% 0.24%
15-Year Fixed Jumbo 2.86% 2.94% 0.06%
10-Year Fixed Jumbo 2.52% 2.6% 0.1%
7/1 ARM Jumbo 2.68% 3.07% -0.25%
5/1 ARM Jumbo 2.61% 3.06% -0.09%
3/1 ARM Jumbo 2.14% 2.74% 0%

A 30-Year Fixed Jumbo loan of $600,000 at 3.22% APR with a $150,000 down payment will have a monthly payment of $2,602. A 20-Year Fixed Jumbo loan of $600,000 at 3.29% APR with a $150,000 down payment will have a monthly payment of $3,414. A 15-Year Fixed Jumbo loan of $600,000 at 2.86% APR with a $150,000 down payment will have a monthly payment of $4,102. A 10-Year Fixed Jumbo loan of $600,000 at 2.52% APR with a $150,000 down payment will have a monthly payment of $5,660. A 7/1 ARM Jumbo loan of $600,000 at 2.68% APR with a $150,000 down payment will have a monthly payment of $2,427. A 5/1 ARM Jumbo loan of $600,000 at 2.61% APR with a $150,000 down payment will have a monthly payment of $2,406. A 3/1 ARM Jumbo loan of $600,000 at 2.14% APR with a $150,000 down payment will have a monthly payment of $2,259. All monthly payments displayed assume a maximum Loan to Value (LTV) of 80% and 740 credit score, and do not include amount for taxes and insurance. The actual monthly payment may be greater.

Source: zillow.com