Mortgage rates moved higher this week, bucking the downtrend of the past several weeks. Mortgage rates are higher but the increases were small. Average 30 year fixed conforming mortgage rates increased 5 basis points and average 15 year mortgage rates increased only 2 basis points.

30 year mortgage rates today are averaging 3.85 percent, up from last week’s average rate of 3.80 percent. 15 year rates are currently averaging 3.04 percent, an increase from last week’s average rate of 3.02 percent.

Jumbo mortgage rates are also slightly higher this week. Average 30 year jumbo mortgage rates are at 4.26 percent, an increase from the previous week’s average 30 year jumbo rate of 3.24 percent. 15 year jumbo mortgage rates are at 3.84 percent, up from prior week’s average rate of 3.81 percent.

Adjustable mortgage rates, which have been under pressure from the Fed raising the fed funds rates, moved higher again this week. Over the past 7 months the Fed increased the fed funds rate 4 times, a total of 100 basis points higher.

These increases put upward pressure on short term U.S. Treasury yields which in turn has forced short term adjustable mortgage rates higher. The Fed is expected to increase the fed funds rate at least one more time in 2017 which will put more upward pressure on mortgage rates.

Conforming 5 year adjustable mortgage rates are currently averaging 3.20 percent, up from 3.14 percent last week. The current average 5 year jumbo adjustable mortgage rate is also higher averaging 3.40 percent, an increase from last week’s average of 3.35 percent.

Mortgage rates and refinance rates are moving higher in 2017 from these levels. The increases won’t be that much but if you’re thinking about refinancing your current loan or buying a home, lock in a rate now.

For the first time in the seven year history of the annual bank stress tests, the Federal Reserve approved capital return plans on all 34 banks it reviewed. The approval of capital return plans means these banks can raise dividends and buy back shares.

Both Citibank and JPMorgan Chase announced their biggest share buybacks ever. Citibank and JPMorgan Chase also increased their quarterly dividends.

How about increasing the paltry deposit rates most of these banks offer? Sorry, no announcements to increase deposit rates.

We have listed the banks giving the largest dividend increases and share buybacks alongside the anemic deposit rates these banks offer. If you decide to look at these banks’ deposit rates, you’ll have to dig through their website to find them. Considering how low the rates are, I would bury them too.

Capital Return Plans and Deposit Rates

Citibank

• Doubled quarterly dividend to 32 cents a share
• Up to $15.6 billion common stock repurchase plan
• 0.01% savings rate
• 0.15% 1 year CD rate

JP Morgan Chase

• Increases quarterly dividend by 6 cents to 56 cents a share
• Up to $19.6 billion stock repurchase plan
• 0.01% savings rate
• 0.02% 1 year CD rate

Bank of America

• Increases quarterly dividend by 60% to 12 cents a share
• Up to $12 billion stock repurchase plans
• 0.01% savings rate
• 0.07% 1 year CD rate

If you are a depositor at these banks, you are treated poorly but if you are a shareholder you are awarded handsomely.

The good news is you don’t have to deposit your money at these banks. Online banks offer a lot higher deposit rates. In the rate database there are many banks currently offering savings rates at 1.30 percent and 1 year CD rates at 1.50 percent.

Fannie Mae, the larger of the two government agencies that insure mortgages, will allow you to spend 50 percent of your monthly pretax income on mortgage and other debt payments. This is up from the current limit of 45 percent. The change is effective starting July 29, 2017.

Even though you can spend up to 50 percent of your income on a mortgage and debt payments it doesn’t mean it’s a good idea. The government’s own Consumer Financial Protection Bureau answers a question about “Why is the 43% debt-to-income ratio important?“

The CFPB states “evidence from studies of mortgage loans suggest that borrowers with a higher debt-to-income ratio are more likely to run into trouble making monthly payments.” In short, the higher the debt to income ratio, the more likely the borrower will default.

Fannie Mae’s move to increase the debt to income ratio isn’t unprecedented. Freddie Mac increased their debt to income ratio to 50 percent several years ago.

In many metropolitan areas of the country, renting is more expensive than buying a home so increasing the debt to income ratio would be beneficial. Harvard did a Housing Costs Study in 2015 that showed millions of people burdened by housing costs.

The study shows homeowners are less likely to be burdened, or severely burdened, by housing costs than renters. 

For example, housing costs in the Miami-Fort Lauderdale-West Palm Beach, FL metropolitan area are as follows:

• 61.5 percent of renters are cost-burdened, only 34.7 percent of homeowners are cost-burdened. (Paying at least 30 percent of income on housing)
• 35.4 percent of renters are severely cost burdened, while only 17 percent of homeowners are severely cost burdened. (paying at least 50 percent of their income on housing)

Fannie was already approving some borrowers with debt to income ratios between 45 and 50 percent but in those cases, other factors came into play like having at least a 20 percent down payment and at least 1 year of reserves in the bank. You will not need either of these factors to qualify for a higher mortgage.

CIT Bank, an online bank, is offering a limited time $100 cash bonus for opening a Premier High Yield Savings Account. CIT Bank, already known for consistently offering one of the best savings rates available, definitely upped the ante with the $100 cash bonus.

You usually see cash deals like this on transactional accounts (e.g. checking accounts) because banks make money on these accounts by charging fees. It will be interesting to see if any of the other online banks start offering a cash bonus on a savings or money market account.

CIT Bank’s savings rate on this account is tiered with higher account balances earning 5 basis points less. Account balances below $100,000 earn a rate of 1.30 percent and balances over earn a rate of 1.25 percent.

To get the $100 bonus deal you can’t just go CIT Bank’s website and open an account. In fact, if you go to CIT Bank’s website under Premier High Yield Savings Account you won’t even see a mention of the deal. The deal was featured in one of their Google ads. When you open an account you have to use the promo code, “Premier” to get the $100 bonus.

CIT Bank Premier High Yield Savings Account Details

Listed below are all the details on CIT Bank’s account.

• $100 minimum opening deposit
• No fees to open or maintain the account
• Interest is compounded daily giving the account an overall higher yield
• Secure online banking 24/7
• FDIC Insured

CIT Bank $100 Cash Bonus Details

Listed below are all the details on the $100 cash bonus.

• A Premier High Yield Savings Account must be opened with Promotional Code “PREMIER” by September 8, 2017.
• The savings account must be funded within 30 days of account opening.
• Money used to fund the account must not already be deposited with CIT Bank or OneWest Bank to  qualify for bonus, aka “new funds.”
• The account must maintain a minimum $15,000 monthly balance for the first 3 full monthly statement cycles.
• There is a limit of one Premier High Yield Savings account bonus offer per customer. If you have multiple accounts only one account will be eligible for the bonus.
• CIT Bank Customers who received a CIT Bank bonus payment or enrolled in another CIT Bank bonus offer between January 1, 2017 and July 14, 2017 (regardless of whether the bonus has yet been paid) are not eligible for this Premier High Yield Savings account bonus offer.

CIT Bank earns a 4 out of 5 star rating. You can see the rating, view more rates, and see a financial overview of CIT Bank on MonitorBankRates’ bank review section: CIT Bank