Mortgage Rates Improve Slightly Today, But Risks Remain

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Posted To: Mortgage Rate Watch

Mortgage rates recovered a small portion of their recent losses today, but the average loan applicant might not even notice. The 2 key ingredients of a mortgage rate (for the purposes of tracking their movement) are the rate itself (the “note rate”) and the upfront costs tied to that rate. The note rate and associated costs make up what many refer to as an “effective rate” (a number, expressed in interest rate form, that adjusts the actual note rate based on the implications of upfront cost changes. It takes big market movement to change note rates, largely because lenders tend to offer rates in 0.125% increments. As such, bond yields such as 10yr Treasuries need to be moving by about that much in order to see a similar change in mortgage rates. That was the case last week as 10yr yields moved…(read more)

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