Mortgage Rates Set to Move Lower on QE3

As we expected last week a weak unemployment report was released which should set the stage for the Federal Open Market Committee (FOMC) to start a third round of quantitative easing to drive bond yields and mortgage rates even lower. Current mortgage rates on 30 year loans are right above record lows set in July and will head down after the FOMC meets this week.

The meeting is being held on Wednesday and Thursday of this week. Right after the second day's meeting the Fed will release a statement on economic policy. You can be sure we will hear more of the same that current economic conditions warrant exceptionally low interest rates until the end of 2014. That has been the Fed's policy for several years now ever since the Great Recession.

What the markets are hoping for is the Fed will say they are starting around around of easing to drive interest rates lower. Traditionally in a slow economy the Fed would lower borrowing costs to spur economic activity but the Fed funds rate is already at a targeted range of zero percent to one quarter percent so the Fed has to use other means to spur activity.

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

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Points

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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 #401822

5.661%

15-Year Fixed

5.375%

$7,500

Includes 0.875 points for $3,500

Lender Fees: $4,000

$3,242 /mo

Next >

NMLS #1025894

5.805%

15-Year Fixed

5.625%

$4,680

Includes 0.995 points for $3,980

Lender Fees: $700

$3,295 /mo

Next >

NMLS #6606

6.022%

15-Year Fixed

5.875%

$3,792

Includes 0.948 points for $3,792

Lender Fees: $0

$3,349 /mo

Next >

NMLS #1025894

6.839%

30-Year Fixed

6.750%

$3,664

Includes 0.741 points for $2,964

Lender Fees: $700

$2,595 /mo

Next >

NMLS #401822

6.884%

30-Year Fixed

6.750%

$5,495

Includes 0.875 points for $3,500

Lender Fees: $1,995

$2,595 /mo

Next >

NMLS #3030

6.889%

15-Year Fixed

6.750%

$3,500

Includes 0.875 points for $3,500

Lender Fees: $0

$3,540 /mo

Next >

NMLS #6606

6.963%

30-Year Fixed

6.875%

$3,580

Includes 0.895 points for $3,580

Lender Fees: $0

$2,628 /mo

Next >

NMLS #3030

7.602%

30-Year Fixed

7.500%

$4,000

Includes 1.000 points for $4,000

Lender Fees: $0

$2,797 /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.

What the Fed can do is buy long term Treasuries to drive mortgage rates even lower. The Fed and do this by using money that is getting back from mortgage backed securities that it bought in the first two rounds of quantitative easing. The Fed can also do the "twist" again, selling short term Treasuries and buying back long term Treasuries to drive long term interest rates lower. If the Fed decides to wait for more negative economic news before acting on more easing you can bet the equities markets will tumble.

Mortgage rates today on 30 year conforming loans are averaging 3.51 percent, a decline from an average 30 year mortgage rate of 3.53 percent set yesterday. If the Fed does start another round of easing we would see average 30 year mortgage rates move down to the 3.35 percent range and possibly lower.

Today you can already find lenders advertising 30 year mortgage rates and refinance rates below the average rate of 3.51 percent, especially if you're willing to pay points. Right now there are a couple of lenders offering 30 year refinance rates at 3.13 percent with points on our rate tables.

Don't want to pay points? You can still get an incredibly low 30 year refinance rate at 3.25 percent depending on the state you live in. Just a few years ago average 30 year mortgage interest rates were a lot right in the 6 percent 7 percent range. If we do see lower mortgage rates in the coming weeks and months you might be able to find a lender offering 30 year rates under 3.00 percent. That would be an incredibly low if you ask me.

Average 15 year conforming mortgage rates are at 2.88 percent today, down from an average 15 year mortgage rate of 2.90 percent. If we see action by the Fed average 15 year mortgage rates would move as low as 2.70 percent. Right now on our 15 year refinance rates list in North Carolina there is one lender, Amerisave, offering 15 year refinance rates at 2.38 percent with 1.977 points so if the Fed acts some lenders might start offering 15 year refinance rates at 2.00 percent. If I ever see a 15 year rate that low I would jump at the chance to lock the rate in for 15 years!

Jumbo mortgage rates today on 30 year loans are averaging 4.19 percent, a decline from an average 30 year jumbo mortgage rate of 4.21 percent. If you're in Connecticut looking for 30 year jumbo refinance rates we have several lenders listed offering 30 year jumbo refinancing rates at 3.75 percent with points. 30 year jumbo refi rates without points can be found as low as 3.88 percent.

Current mortgage rates on 15 year jumbo home loans are averaging 3.39 percent, down from an average 15 year jumbo mortgage interest rate of 3.42 percent. Also on our CT refinance rates list you can find lenders offering 15 year refi rates at 2.88 percent with points. Without points there are lenders offering rates as low as 3.13 percent.

5 year conventional mortgage rates are averaging in at 2.89 percent, higher than Friday's average 5 year conventional adjustable mortgage rate of 2.84 percent. Searching our 5 year adjustable refinance rates list for Nevada I see one lender advertising 5 year adjustable mortgage refinance rates at 2.13 percent with 2 mortgage points. If you don't want to pay any points we have lenders listed offering rates at 2.25 percent with zero points.

Jumbo adjustable 5 year mortgage rates are averaging in at 2.84 percent, down from an average 5 year jumbo mortgage rate of 2.85 percent. Right now on our 5 year jumbo refi list for Virginia there is a lender offering rates as low as 2.38 percent wit 0.90 points. Without points the lowest jumbo rate is at 2.63 percent.