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Mortgage Rates Move Lower This Week, 5/1 ARM Rates Quoted at 2.25%

Bond rates and mortgage rates continue to drift lower this week, making this the second consecutive week average mortgage rates moved lower. Conforming 5/1 adjustable mortgage rates today are averaging 3.54 percent, a decline from last week's average 5 year adjustable rate of 3.69 percent.

Both average mortgage rates and 10 year bond yields are lower because of a weak unemployment report released on January 10. Prior to the report, 10 year bond yields were hovering around 3.00 percent but have since moved down to 2.83 percent the past 10 days. Mortgage rates followed suit by moving lower about 20 basis points since the 10th.

Mortgage Rates Move Lower This Week 5-1 ARM Rates Quoted at 2255/1 Conforming Mortgage Rates at 2.25%

The lowest quoted conforming 5 year adjustable rates in our rate table are more than 1.25 basis points below the average rate. The best rate right now in our database for California and most other states is at 2.25 percent with 2 mortgage points. We also have other lenders quoting rates at 2.375 percent with points and the lowest rate without points is at 2.50 percent.

A 2.25 percent interest rate on a mortgage is very enticing but there are risks with adjustable loans, the main risk being that the mortgage rate adjusts after the initial period. On a 5/1 adjustable loan, the mortgage interest rate stays the same for the first 5 years but adjusts every year after. If the interest rate adjusts higher, the monthly mortgage payment increases.

Although current mortgage rates are lower this week over last, rates will be increasing for all of 2014 and 2015. By the end of 2015, 5 year adjustable rates will probably be 1.00 percent to 2.00 percent higher from current levels. Keep this in mind if you are planning on getting an adjustable mortgage loan.

Conventional 30 Fixed Mortgage Rates Today

Today's mortgage rates on 30 year conventional loans are averaging 4.39 percent, a decline from the prior week's average 30 year mortgage rate of 4.42 percent. Average 30 year mortgage rates were above 4.50 percent late last year and have moved lower due to lower bond rates.

The best 30 year refinance rates on our rate tables remain at 3.875 percent with points in the state of Florida. The same lenders quoting refinance rates under 4.00 percent in FL are also quoting 30 year rates under 4.00 percent in most other states. The lowest 30 year refinancing rates without points are available at 4.125 percent, still below the average rate.

15 Year Conforming Mortgage Rates

Average 15 year conforming mortgage rates are currently at 3.45 percent, down from the previous week's average 15 year conforming mortgage rate of 3.47 percent. Since late December, average 15 year rates haven't moved lower as much as 30 year rates but we have many lenders quoting rates well below the average of 3.45 percent.

The best 15 year mortgage refinance rates in our database for the state of New York are currently at 3.00 percent with just under 2 mortgage points. The best 15 year refi rates quoted without points in our database for NY are at 3.37 percent, just below the average rate. For the state of Pennsylvania the lowest 15 year rates are at 2.875 percent with points and at 3.125 percent with no points.

Current 30 year Jumbo Mortgage Rates

Bucking the downtrend, average 30 year jumbo mortgage rates are higher this week over last. Average 30 year jumbo mortgage rates today are at 4.56 percent, an increase from last week's average 30 year jumbo mortgage rate of 4.54 percent. Average 30 year jumbo rates are still lower from last month's high of 4.65 percent.

The best jumbo refinance rates in our database for the state of Texas are lower than the current average rate. The best jumbo refinance rate this week is quoted at 4.25 percent with 1 mortgage point and the best jumbo refi rate without points is also below the average at 4.375 percent.

15 Year Jumbo Mortgage Rates

Today's mortgage rates on 15 year jumbo loans are sharply higher this week and are now above 4.00 percent at 4.02 percent. Last week, average 15 year jumbo rates were 18 basis points lower at 3.82 percent. 15 year jumbo rates will fall back below 4.00 percent later this week.

The lowest 15 year jumbo rates in our database with points are still below 4.00 percent. The best rate for the state of Virginia is at 3.375 percent with 2 mortgage points. The best 15 year jumbo refinancing rate without points on our rate table in VA is still below the average rate at 3.625 percent.

5 year Jumbo Adjustable Mortgage Rates

Rates on 5 year jumbo adjustable mortgages are currently averaging 3.09 percent, no change from last week's average 5 year jumbo rate. Average 5 year jumbo rates will remain above 3.00 percent but you can still find lenders quoting 5 year jumbo adjustable rates well below the average.

The best 5 year jumbo adjustable rates in our database for the state of Arizona are currently at 2.625 percent with just under 2 mortgage points. The lowest 5 year jumbo rates without points in our database are slightly above the average rate at 3.25 percent. These same rates are available in most other states.
Author: Brian McKay
January 21st, 2014