Refinance Home Loan Rates – 15 Year Mortgage Rates Lower

Refinance home loan rates have been very close to all time lows for the last month.  Recently we have seen conventional 15 year fixed mortgage rates lower.  Today the 15 year fixed rate is at 4.27% and has been around 4.25% for the last month.  For much of the summer we saw mortgage interest rates higher but that changed at the beginning of September.

The reason that we saw mortgage interest rates higher throughout the summer was the fact that the 10 year treasury rate yield was moving higher.  It took the 10 year yield rolling over and heading lower before mortgage rates started to fall again.  Now the Federal Reserve Bank has announced that they are going to stop buying treasuries by the end of October.

It is very likely that when the Fed stops buying treasuries that there will be an increase in treasury yields.  By stopping their purchases the Fed is hoping that foreign investors start to sink their money into treasuries.  The two biggest investors in treasuries are currently Japan and China and they have yet to show that they are going to pick up where the Fed left off.

Until these treasuries increase their yields foreign investors are going to sit on the sidelines because they can get a better return elsewhere.  The 10 year yield currently sit at around 3.4%.  Getting a return of 3.4% is not overly attractive when there are many other investment vehicles out there that could produce just as good of a return.

The 10 year treasury rate yield will go a long way in determined where mortgage interest rates go.  If the 10 year yield continues its short term up trend and goes higher, well above the 50 day moving average, then there is little doubt that we are going to see higher mortgage rates.  With that being said, now might be one of the best times in recent history to refinance and lock in at a low mortgage rate.

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Author: Alan Lake