What is a good mortgage rate for 2017?

As mortgage rates move back down everyone is asking; “What is a good mortgage rate for 2017?”.  The bond market has returned to 2016 levels so lenders have started to be more aggressive with how they price out their various mortgage loan programs.  But let’s start with the basics before determining what is a good mortgage rate for 2017.

Mortgage Interest RatesEverything starts with the Mortgage Backed Securities market (MBS) and this is the market that mostly influences mortgage rates.  Some people claim it’s the 10y yield, some even say mortgage rates are set by the Fed but that simply is not true.  Does the 10y yield influence mortgage rates? Sure.  Does the Fed action sometimes influence mortgage rates? Sure.  But the key word is influence; and that’s all they do.  The MBS market has the most direct correlation to mortgage rates and when you’re looking for low home loan rate it’s important to keep an eye on MBS levels.

After that is lender volume; sometimes the bond market is doing great but for some reason their rates are not so good;why is that? While every lender is different the higher rates may be a factor of lender volume.  Maybe for the last 4-8 weeks they’ve exceeded their target in terms of the amount of loans they’ve funded so to pull back a bit they’ll raise rates.  Or maybe a lender has received a massive amount of submissions in the last week so to slow down the rate of submissions they’ll raise rates to get caught up.

The answer to what is a good mortgage rate for 2017 is dependent on how the market does for the remainder of the year.  But for now; a mortgage rate below 4.00% on a 30 year fixed, and a mortgage rate below 3.375% on a 15 year fixed are great rates for 2017.  On a 20 year fixed rate mortgage a rate below 3.87% is also a great rate for 2017 (and this is based on zero points).  All of these terms were significantly higher earlier this year so it’s great to see lowerBBB A+ Accredited mortgage rates come back to the market.  What about a 5/1 adjustable rate mortgage?  Below 3.25% is a great rate compared to what we’ve seen earlier this year.

If you are looking to refinance your current mortgage or your considering buying a new home please be sure to contact us directly for a no cost – no obligation quote.  We have a top rating with the Better Business Bureau and industry low mortgage rates.  Our direct number is 1-800-550-5538.