Mortgage Rates Decline as Fiscal Cliff is Averted

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Mortgage rates today are lower as Democrats and Republicans were able to pass an agreement to avoid the fiscal cliff. A bare minimum deal was put together as the sequester of spending cuts was put off for another two months. Both parties compromised on the tax side of the deal, raising the top rate on joint filers earning more than $450,000 to return to 39.6%, up from the 35% rate in place since the Bush tax cuts of 2001.

Today's mortgage rates on 30 year conventional home loans are averaging 3.41 percent, a decline from last week's average 30 year mortgage rate of 3.45 percent. Over the next couple of days average rates will head higher since 10 year bond yields are up 8 basis points to 1.84 percent on the fiscal cliff deal.



Over the longer term, current mortgage rates will head lower since the Fed is still buying mortgage-backed (MBS) securities to drive rates lower. Although average 30 year rates are at 3.41 percent you can find lenders quoting rates below the average. Right now on our 30 year refinance rates list for the state of Massachusetts we have two lenders, Amerisave.com and AmericanInterbanc.com, quoting 30 year rates at 2.875 percent with 1.875 mortgage points.

Average 15 year conforming mortgage rates today are at 2.81 percent, a decline from last week's average 15 year mortgage rate of 2.84 percent. Over the next couple of days average 15 year rates will move higher on higher bond yields but over the next couple of months average 15 year rates will fall below 2.65 percent and possibly as low as 2.50 percent.

There are several mortgage companies quoting 15 year conventional mortgage refinance rates well below the current average and lower than 2.50 percent. The lowest 15 year refinance rate on our list for the state of Texas is from Amerisave.com at 2.25 percent with 1.66 points. The lowest 15 year Texas refinance rate on our list without points is from Texaslending.coma at 2.375 percent.

30 year jumbo mortgage rates currently are averaging 4.02 percent, a decline from last week's average 30 year jumbo mortgage rate of 4.08 percent. As with conforming mortgages moving higher, the next two days jumbo mortgage rates will move higher as well but the longer term trend is lower. In 2013 average 30 year jumbo rates will fall back below 4.00 percent and possibly as low as 3.85 percent.

You can find lenders quoting 30 year jumbo refinance rates well below the current average of 4.02 percent. The best jumbo rates on our rate list for California are at 3.50 percent with 1.375 percent from Home Loan Enterprise. The lowest California refinance rate without points on our list is from Integrity First at 3.99 percent.

15 year jumbo mortgage interest rates are currently averaging 3.42 percent, a decline from last week's average 15 year jumbo rate of 3.44 percent. 15 year rates will probably move above 3.50 percent over the next few days but will fall as low as 3.35 percent in 2013. Right now the lowest 15 year jumbo refinancing rates on our list for the state of Florida are at CloseYourOwnLoan.com at 2.75 percent with 2 points. The lowest rate without points is from Quick Quote Mortgage at 3.25 percent with zero points.
 
Author: Brian McKay
January 2nd, 2013