Mortgage Rate Trends
The chart on this page reflects the weekly trend of fixed rate mortgages (FRM) and adjustable rate mortgages (ARM) for different mortgage terms. The average Mortgage loan points are also displayed.
Interest rates on Home mortgages are important because mortgage interest is a major item in many people’s budgets. Even small changes in mortgage interest rates can have a large impact on how affordable it is to own a home.
Mortgage rate movements are based on the simple concept of supply and demand. If the demand for credit (loans) increases, so do mortgage interest rates. Interest rates would have little impact upon sales or inflation if most purchases were made using cash that has already been earned, as they are in some countries. However, the widespread usage of credit cards and consumer-oriented loans among Americans seems unlikely to change in the near future. The interest a lender earns is the reward for the lender taking a risk and loaning money to a borrower. The interest rate on a mortgage has a direct impact on the size of a mortgage payment - higher interest rates mean higher mortgage payments. It is for this reason that a mortgage quote comparison is very important when you are shopping for a mortgage.
Fixed mortgage rates closely follow that of Treasury Bond yields, since the same type of investors like both. However, since Fannie May and Freddie Mac have been in crisis this year, investors are more leery of mortgage products, and have chosen to invent more in Treasury bonds instead. Fixed mortgage rates are about one-half percentage point higher than three months ago, according to Bankrate.com. At that time, the average 30-year fixed mortgage rate was 6.27 percent, meaning that a $165,000 loan would have carried a monthly payment of $1,018. Fixed mortgage rates and adjustable mortgage rates are the predominant players in the mortgage interest rate industry.
Mortgage rates are gaining some relief from oil prices that are finally beginning to decline. This removes an inflationary threat to interest rates and is good news for long term fixed rate mortgage loans. Mortgage rates are part of the overall terms in which you agree to pay back the mortgage loan you took out to pay for your new home. There are various terms to choose from depending on your financial situation, how long you want to live in the home, and the status of the housing market.
