30 Year Fixed Mortgage Rates – Rates at 5% at the Beginning of 2010
Posted on | December 31, 2009 | No Comments
The average for 30 year fixed mortgage rates has been all over the map in the last month. Since the beginning of December we have seen mortgage interest rates go from 4.5% all the way up to 5.35% and now they are back to 5%. This great volatility in mortgage rates is likely caused by the increase in the 10 year treasury rate yield throughout the month.
The 10 year treasury rate yield and the 30 year fixed-rate mortgage have had a very strong correlation for quite some time. Since Freddie Mac’s began collecting mortgage data, 1971, the 30 year fixed mortgage rate and the 10 year treasury rate yield have moved in tandem. That correlation has weakened a little bit in 2009 because the Federal Reserve has purchased mortgage-backed securities but there is still a strong correlation.
As the 10 year treasury radio moves higher mortgage rates eventually follow. In the month of December we have seen the 10 year treasury rate yield moved from 3.2% all the way up to 3.85%. The strong move higher has pushed mortgage rates from 4.5% all the way back up to 5%. If you are looking to refinance at the very bottom of mortgage rates you might be one month too late.
Just because mortgage rates are up to 5% does not mean that you will not greatly benefit from refinancing. It is extremely important to sit down the financial calculator and determine how much money you would save by refinancing at the low mortgage rates today. It is also important to submit a mortgage application to get the interest rate you will actually qualify for rather than guessing this rate.
There are many mortgage lenders who are currently advertising extremely low mortgage interest rates. It might be a good idea to contact some of these lenders and see what they are willing to offer you. Do not get caught up with one mortgage lender as there is great competition out there and you might find someone who works better with you.
Author: Alan Lake
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