Mortgage Rates Increase This Week as Fed Raises Interest Rates

Mortgage rates increased again this week to the highest level this year. We expected mortgage rates to increase because the Federal Reserve increased the fed funds rate by 25 basis points last week. Mortgage rates today on 30 year conforming loans are currently at 4.57 percent.

The fed funds rate was increased on September 27th to a level of 2.00 percent to 2.25 percent. Since the increase happened a few days ago, we believe the 0.25 percent increase isn't fully reflected in current mortgage rates. Average 30 year rates will move towards 4.65 to 4.75 percent in the coming weeks.

While the average 30 year rate is at 4.57 percent, there are lenders offering rates lower than Mortgage Rates Increase as Fed Tightensaverage. The lowest rates in our database with no points are around 4.375 percent, about 20 basis points lower than the average. If you're willing to pay points, you can get an ever lower rate.

Loan Term
Lender
APR / Rate
Fees / Points
Payment
Tomo Mortgage, LLC.
NMLS #2059741
5.606%
15-Year Fixed
5.490%
$3,032
Includes 0.758 points for $3,032
Lender Fees: $0
$3,267 /mo
Bison State Bank
NMLS #757416
5.630%
15-Year Fixed
5.490%
$3,648
Includes 0.912 points for $3,648
Lender Fees: $0
$3,267 /mo
Mutual of Omaha Mortgage, Inc.
NMLS #1025894
5.650%
15-Year Fixed
5.490%
$4,172
Includes 0.868 points for $3,472
Lender Fees: $700
$3,267 /mo
Different Mortgage
NMLS #324599
License: 324599
5.673%
15-Year Fixed
5.500%
$4,570
Includes 0.875 points for $3,500
Lender Fees: $1,070
$3,269 /mo
Different Mortgage
NMLS #324599
License: 324599
6.494%
30-Year Fixed
6.375%
$5,070
Includes 1.000 points for $4,000
Lender Fees: $1,070
$2,496 /mo
Tomo Mortgage, LLC.
NMLS #2059741
6.569%
30-Year Fixed
6.490%
$3,292
Includes 0.823 points for $3,292
Lender Fees: $0
$2,526 /mo
Bison State Bank
NMLS #757416
6.590%
30-Year Fixed
6.500%
$3,744
Includes 0.936 points for $3,744
Lender Fees: $0
$2,529 /mo
Mutual of Omaha Mortgage, Inc.
NMLS #1025894
6.600%
30-Year Fixed
6.490%
$4,592
Includes 0.973 points for $3,892
Lender Fees: $700
$2,526 /mo
HSBC Bank USA, N.A.
NMLS #399799
6.722%
30-Year Fixed
6.625%
$4,184
Includes 0.714 points for $2,856
Lender Fees: $1,328
$2,562 /mo
PenFed Credit Union
NMLS #401822
6.734%
30-Year Fixed
6.625%
$4,495
Includes 0.625 points for $2,500
Lender Fees: $1,995
$2,562 /mo
Different Mortgage
NMLS #324599
License: 324599
6.743%
5-Year ARM
6.625%
$4,954
Includes 0.971 points for $3,884
Lender Fees: $1,070
$2,562 /mo
PenFed Credit Union
NMLS #401822
7.698%
15-Year Fixed
7.375%
$8,000
Includes 1.000 points for $4,000
Lender Fees: $4,000
$3,680 /mo
Rate data provided by RateUpdate.com. Displayed by ICB, a division of Mortgage Research Center, NMLS #1907, Equal Housing Opportunity. Payments do not include taxes and insurance premiums. Actual payments will be greater with taxes and insurance included. Rate and product details.

Lenders Offer Lower Mortgage Rates

Garden State Home Loans is currently quoting 30 year refinance rates with .10 points at 4.125 percent. GSHL's rate is almost .50 percent lower than the current average rate. Getting a quarter point lower mortgage for one tenth point is a great deal.

Average 15 year conforming rates also shot higher this week. The current average 15 year rate is at 3.93 percent, up 10 basis points from the prior week's average rate of 3.83 percent. We expect average 15 year rates to move above 4.00 percent in the coming weeks.

Right now, the best 15 year mortgage rate in our database is much lower than the average rate. The lowest current rate offered by Sebonic is at 3.24 percent with 1.10 mortgage points. The lowest rate without points is at 3.75 percent, still below the average rate.

Unfortunately, the days of getting the lowest mortgage rates are over. Rates will continue to move higher for the rest of this year and in 2019. Although rates are off  of their all-time lows, historically speaking, current rates are still good. Go back a decade and average 30 year rates were above 5.00 percent. If you go back even further to the early 1980s, the highest average 30 year rate was above 17 percent.

 
Author: Brian McKay
October 3rd, 2018

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