Mortgage Rates Drop as Fed Continues to Taper, 30 Year Mortgage Rates at 3.875

Average mortgage rates today are lower as the Federal Reserve announced another $10 billion reduction in their purchasing bonds and mortgage backed securities (MBS). The Fed wrapped up their two day meeting yesterday and announced that starting in February they will buy only $65 billion a month in bond and MBS.

The Fed has been buying long term U.S. bonds and MBS to force bond rates and mortgage rates lower. This third round of  quantitative easing has worked at forcing bond rates and mortgage rates down to record lows. The Fed's decision to slow these purchases doesn't come as a surprise but the bond market reaction is a surprise.

Mortgage Rates and Bond Rates Move Lower Despite Fed's Tapering

Loan Type

Purchase Refinance with Cash out Refinance

State

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FICO Score

Superior (780-850) Exceptional (760-779) Excellent (740-759) Very Good (720-739) Good (700-719) Above Average (680-699) Average (660-679) Fair (640-659) Need Improvement (620-639) Poor (350-620)

Loan Amount

$

Points

Up to 0 points Up to 0.5 points Up to 1 points Up to 1.5 points Up to 2 points Up to 2.5 points Up to 3 points

LTV

%

Loan Term

 15-Year Fixed  20-Year Fixed  30-Year Fixed  5-Year ARM  7-Year ARM  10-Year ARM

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The lenders whose rates and other terms appear on this chart are ICB's advertising partners. They provide their rate information to our data partner RateUpdate.com. Unless adjusted by the consumer, advertisers are sorted by APR from lowest to highest. For any advertising partners that do not provide their rate they are listed in advertisement display units at the bottom of the chart. Advertising partners may not pay to improve the frequency priority or prominence of their display. The interest rates, annual percentage rates and other terms advertised here are estimates provided by those advertising partners based on the information you entered above and do not bind. Any lender Monthly payment amounts stated do not include amounts for taxes and insurance premiums. The actual payment obligation will be greater if taxes and insurance are included. Although our data partner RateUpdate.com collects the information from the financial institutions themselves, the accuracy of the data cannot be guaranteed. Rates may change without notice and can change intraday. Some of the information contained in the rate tables including but not limited to special marketing notes is provided directly by the lenders. Please verify the rates and offers before applying for a loan with the financial institution themselves. No rate is binding until locked by a lender.

Lender

APR / Rate

Fees / Points

Payment

NMLS #2562839

4.924%

15-Year Fixed

4.750%

$4,625

Includes 0.875 points for $3,500

Lender Fees: $1,125

$3,112 /mo

Next >

NMLS #2473786

4.934%

15-Year Fixed

4.750%

$4,887

Includes 0.948 points for $3,792

Lender Fees: $1,095

$3,112 /mo

Next >

NMLS #1835285

5.007%

15-Year Fixed

4.875%

$3,500

Includes 0.875 points for $3,500

Lender Fees: $0

$3,138 /mo

Next >

NMLS #1935422

License: 60DBO-109262

5.047%

15-Year Fixed

4.750%

$7,933

Includes 0.662 points for $2,648

Lender Fees: $5,285

$3,112 /mo

Next >

NMLS #324599

License: 324599

5.063%

15-Year Fixed

4.875%

$5,070

Includes 1.000 points for $4,000

Lender Fees: $1,070

$3,138 /mo

Next >

NMLS #757416

5.140%

15-Year Fixed

4.990%

$3,960

Includes 0.990 points for $3,960

Lender Fees: $0

$3,162 /mo

Next >

NMLS #1935422

License: 60DBO-109262

5.300%

5-Year ARM

5.125%

$7,925

Includes 0.660 points for $2,640

Lender Fees: $5,285

$2,178 /mo

Next >

NMLS #2473786

5.361%

5-Year ARM

5.250%

$4,967

Includes 0.968 points for $3,872

Lender Fees: $1,095

$2,209 /mo

Next >

NMLS #6606

5.381%

15-Year Fixed

5.240%

$3,708

Includes 0.927 points for $3,708

Lender Fees: $0

$3,214 /mo

Next >

NMLS #1025894

5.508%

15-Year Fixed

5.375%

$3,480

Includes 0.695 points for $2,780

Lender Fees: $700

$3,242 /mo

Next >

NMLS #1835285

5.578%

5-Year ARM

5.500%

$3,439

Includes 0.735 points for $2,940

Lender Fees: $499

$2,272 /mo

Next >

NMLS #1835285

5.817%

30-Year Fixed

5.750%

$2,927

Includes 0.607 points for $2,428

Lender Fees: $499

$2,335 /mo

Next >

NMLS #1935422

License: 60DBO-109262

5.827%

30-Year Fixed

5.625%

$8,917

Includes 0.908 points for $3,632

Lender Fees: $5,285

$2,303 /mo

Next >

NMLS #2562839

5.847%

5-Year ARM

5.750%

$4,229

Includes 0.776 points for $3,104

Lender Fees: $1,125

$2,335 /mo

Next >

NMLS #2473786

5.861%

30-Year Fixed

5.750%

$4,847

Includes 0.938 points for $3,752

Lender Fees: $1,095

$2,335 /mo

Next >

NMLS #2562839

5.867%

30-Year Fixed

5.750%

$5,125

Includes 1.000 points for $4,000

Lender Fees: $1,125

$2,335 /mo

Next >

NMLS #324599

License: 324599

5.979%

30-Year Fixed

5.875%

$4,570

Includes 0.875 points for $3,500

Lender Fees: $1,070

$2,367 /mo

Next >

NMLS #757416

6.045%

30-Year Fixed

5.990%

$2,376

Includes 0.594 points for $2,376

Lender Fees: $0

$2,396 /mo

Next >

NMLS #6606

6.205%

30-Year Fixed

6.125%

$3,420

Includes 0.855 points for $3,420

Lender Fees: $0

$2,431 /mo

Next >

NMLS #1025894

6.208%

30-Year Fixed

6.125%

$3,520

Includes 0.705 points for $2,820

Lender Fees: $700

$2,431 /mo

Next >

NMLS #399799

6.218%

30-Year Fixed

6.125%

$4,111

Includes 0.696 points for $2,784

Lender Fees: $1,327

$2,431 /mo

Next >

NMLS #324599

License: 324599

6.222%

5-Year ARM

6.125%

$4,206

Includes 0.784 points for $3,136

Lender Fees: $1,070

$2,431 /mo

Next >

Rate data provided by RateUpdate.com. Displayed by ICB, a division of Mortgage Research Center, NMLS #1907, Equal Housing Opportunity. Payments do not include taxes and insurance premiums. Actual payments will be greater with taxes and insurance included. Rate and product details.

Bond rates and mortgage rates were supposed to head higher when the Fed starting slowing their monthly purchases, so what happened? The initial market reaction and lower bond rates is the classic flight to quality investments. Emerging economics and their equity markets have benefited from the Fed's liquidity over the years. They are now seeing the opposite happen as investors flee, which has sent these markets tumbling the past week.

Equity prices in the U.S. have also tumbled the past week, scaring investors. When investors are scared, they rush into buying U.S. Treasuries and as they buy, bond prices move higher and bond yields move lower. Mortgage lenders tie their rates to long term bond rates, lower bond rates means lower mortgage rates, at least for now.

Mortgage Rates Will Eventually Move Higher This Year

Once the fear in the equity markets has dissipated, the Fed's tapering will eventually send bond rates and current mortgage rates higher. Mortgage interest rates will be moving higher in 2014, 2015 and beyond, until the next economic downturn.The old saying "you can't fight the Fed" is still true. Once the Fed has decided interest rates should go up, rates will go up.

The good news is that even though rates are moving higher, the increases will be small over the next couple of years. Average 30 year conforming mortgage rates are predicted to only be around 5.00 percent by the end of 2014.  By the end of 2015, 30 year rates on average are only expected to be around 5.25 percent.

These rates are still low, historically speaking, and low when compared to rates over the past decade. Back in the early 1980's, average 30 year rates hit an unfathomable high of 17.45 percent. Back in the early 2000's, average 30 year rates were in the 7 percent to 8 percent range.

30 Year Mortgage Rates Today Averaging 4.31 Percent

Average 30 year conforming mortgage rates are currently at 4.31 percent, down from the prior week's average 30 year rate of 4.41 percent. Earlier this week, we predicted average 30 year mortgage rates would fall if equity prices and bond rates continued to fall.  Average 30 year rates could fall to around 4.25 percent sometime this weekend.

Average 30 year rates are at 4.31 percent but there are plenty of lenders quoting 30 year mortgage rates with points around 4.00 percent. The lowest 30 year rates with points on our rate table for the state of California are currently at 3.875 percent with 1.225 mortgage points. In most other states, you can find lenders quoting 30 year refinance rates at 3.875 percent to 4.125 percent.

15 Year Mortgage Rates at 3.36 Percent

Today's 15 year mortgage rates are currently averaging 3.36 percent, down from last week's average 15 year rate of 3.46 percent. By this weekend, average 15 year mortgage rates could fall as low as 3.25 percent. The best rates currently available on our rate tables are much lower than the average rate.

For the state of Texas we have one lender, Aimloan, quoting 15 year refinance rates at 2.75 percent with 1.756 mortgage points. We also have several other lenders quoting 15 year refinance rates with points at 2.875 percent. The best refinance rate without points is still below the average at 3.125 percent. We also have the same lenders quoting 15 year rates in all other states around 3.00 percent.

Today's 30 Year Jumbo Mortgage Rates

30 year jumbo mortgage rates today are averaging 4.51 percent, a decline from the previous week's average 30 year jumbo mortgage rate of 4.59 percent. Average 30 year jumbo rates, which were around 5.00 percent a few months ago, will fall back below 4.50 percent this weekend.

The best 30 year jumbo refinance rates in our database for the state of New York are from Capital One at 4.125 percent with 2 mortgage points. The lowest 30 year jumbo rate without points is still below the average rate. The lowest rate is from Alpine Mortgage Services at 4.375 percent.

Current 15 Year Jumbo Mortgage Rates

The current average 15 year jumbo mortgage rate is at 3.91 percent, down from last week's average 15 year jumbo rate of 4.02 percent. Average 15 year rates will fall towards 4.85 percent this weekend but right now you can find lenders quoting rates below 4.85 percent.

The best 15 year jumbo mortgage rates in our database for the state of Florida are currently from Smarter Mortgages at 3.125 percent with 0.875 mortgage points. The lowest 15 year jumbo refi rates without points in our database for FL are also from Smarter Mortgages at 3.75 percent.

Average 5/1 Adjustable Mortgage Loan Rates

The current average 5/1 adjustable mortgage rates is at 3.51 percent, down from last week's average 5 year adjustable rate of 3.59 percent. This coming weekend average 5/1 conforming rates will fall back below 3.50 percent, probably as low as 3.45 percent.

The best 5/1 conforming adjustable rates in our database for the state of Georgia are considerably lower than the average rate. We have three lenders, Certus Bank Mortgage, First Internet Bank, and Consumer Direct Mortgage, all offering 5/1 adjustable refinancing rates at 2.25 percent with points.

The lowest 5/1 adjustable refi rates without points from Journey Financial, also well below the average at 2.50 percent. These same lenders and other lenders are also quoting 5 year adjustable rates as low in all other states in our database of rates.

5 year Jumbo Adjustable Mortgage Rates

Current mortgage rates on 5 year adjustable jumbo loans are at 3.04 percent, down from last week's average 5 year jumbo rate of 3.10 percent. This coming weekend average 5 year jumbo rates could fall below 3.00 percent, especially if 10 year bond yields mover lower.

We also have lenders quoting 5 year jumbo adjustable refinance rates well below the average and well below 3.00 percent. The best jumbo rate right now in our database for the state of Colorado are from Cornerstone Mortgage Group at 2.125 percent with 2 mortgage points. The best jumbo refi rate without points also from Cornerstone Mortgage Group is at 2.75 percent.