Short Term Direction of Mortgage Rates Depends on Greece

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Mortgage rates increased the past month, following 10 year U.S. Treasury yields higher. Mortgage rates today on 30 year conforming loans are averaging 4.18 percent. About a month ago, 30 year mortgage rates were averaging 3.85 percent. Where rates move the next week is entirely dependent on how Greece's debt talks play out.

Bond yields in the United States and across the globe have been swayed on the ups and downs in debt talks involving Greece and its creditors. The most recent news is that its creditors rejected Greece's new proposals, according to Greek Prime Minister Alexis in a Tweet.
Loan Type
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State/City    Zip Code
Loan Amt Points FICO % Down
  
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30 yr fixed refi in 06101, All points, Credit score: 740+     Sort by:
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APR
Rate
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30 yr fixed Mortgage Loan from Garden State Home Loans
Garden State Home Loans
https://www.brimg.net/system/img/inst/7950_logo.gif
300000
Refinance
3.948
3.874
USD
Garden State Home Loans Logo
NMLS # 473163
State Lic # ML-473163
(877) 387 - 9107
at 0.100 pts
30 day lock rate
Est payment: $1,410.54
Fees in APR: $2,376
Thanks for the inquiry! 
 
30 yr fixed Mortgage Loan from Garden State Home Loans
Garden State Home Loans
https://www.brimg.net/system/img/inst/7950_logo.gif
300000
Refinance
4.124
4.124
USD
Garden State Home Loans Logo
NMLS # 473163
State Lic # ML-473163
(877) 387 - 9107
at 0.000 pts
30 day lock rate
Est payment: $1,453.77
Fees in APR: None
Thanks for the inquiry! 
 
30 yr fixed Mortgage Loan from Better.com
Better.com
https://www.brimg.net/system/img/inst/9722_logo.gif
300000
Refinance
4.129
4.125
USD
Better.com Logo
NMLS # 330511
State Lic # ML-330511
at 0.000 pts
30 day lock rate
Est payment: $1,453.95
Fees in APR: $127
Thank you for your quote. 
 
30 yr fixed Mortgage Loan from Garden State Home Loans
Garden State Home Loans
https://www.brimg.net/system/img/inst/7950_logo.gif
300000
Refinance
3.872
3.749
USD
Garden State Home Loans Logo
NMLS # 473163
State Lic # ML-473163
(877) 387 - 9107
at 1.100 pts
30 day lock rate
Est payment: $1,389.18
Fees in APR: $1,185
Thanks for the inquiry! 
 
30 yr fixed mtg refi Mortgage Loan from Bank of America
Bank of America
300000
Refinance
4.365
4.250
USD
Bank of America
4.365%
4/15/2019
4.250%
at 0.903 pts
60 day lock rate
Est payment: $1,475.82
Fees in APR: $1,351
 
 
30 yr fixed mtg refi Mortgage Loan from Savings Bank of Danbury
Savings Bank of Danbury
300000
Refinance
4.272
4.250
USD
Savings Bank of Danbury
4.272%
4/12/2019
4.250%
at 0.000 pts
60 day lock rate
Est payment: $1,475.82
Fees in APR: $790
 
 
30 yr fixed mtg refi Mortgage Loan from First National Bank of Omaha
First National Bank of Omaha
300000
Refinance
4.439
4.375
USD
First National Bank of Omaha
4.439%
4/11/2019
4.375%
at 0.500 pts
60 day lock rate
Est payment: $1,497.86
Fees in APR: $752
 
 
30 yr fixed mtg refi Mortgage Loan from TD Bank, NA
TD Bank, NA
300000
Refinance
4.154
4.125
USD
TD Bank, NA
4.154%
4/16/2019
4.125%
at 0.000 pts
45 day lock rate
Est payment: $1,453.95
Fees in APR: $1,043
 
 
30 yr fixed mtg refi Mortgage Loan from Citizens Bank, NA
Citizens Bank, NA
300000
Refinance
4.403
4.375
USD
Citizens Bank, NA
4.403%
4/12/2019
4.375%
at 0.000 pts
60 day lock rate
Est payment: $1,497.86
Fees in APR: $998
 
 
30 yr fixed mtg refi Mortgage Loan from The Guilford Savings Bank
The Guilford Savings Bank
300000
Refinance
4.166
4.125
USD
The Guilford Savings Bank
4.166%
4/12/2019
4.125%
at 0.250 pts
60 day lock rate
Est payment: $1,453.95
Fees in APR: $719
 
 
30 yr fixed mtg refi Mortgage Loan from LincolnWay Community Bank
LincolnWay Community Bank
300000
Refinance
4.155
4.125
USD
LincolnWay Community Bank
4.155%
4/16/2019
4.125%
at 0.000 pts
30 day lock rate
Est payment: $1,453.95
Fees in APR: $1,085
 
 
30 yr fixed mtg refi Mortgage Loan from Union Savings Bank
Union Savings Bank
300000
Refinance
4.399
4.375
USD
Union Savings Bank
4.399%
4/12/2019
4.375%
at 0.000 pts
60 day lock rate
Est payment: $1,497.86
Fees in APR: $852
 
 
30 yr fixed mtg refi Mortgage Loan from UniBank for Savings
UniBank for Savings
300000
Refinance
4.536
4.500
USD
UniBank for Savings
4.536%
4/12/2019
4.500%
at 0.250 pts
60 day lock rate
Est payment: $1,520.06
Fees in APR: $500
 
 
30 yr fixed mtg refi Mortgage Loan from Santander Bank, N.A.
Santander Bank, N.A.
300000
Refinance
4.557
4.500
USD
Santander Bank, N.A.
4.557%
4/18/2019
4.500%
at 0.000 pts
60 day lock rate
Est payment: $1,520.06
Fees in APR: $2,004
 
 
30 yr fixed mtg refi Mortgage Loan from The Washington Trust Company
The Washington Trust Company
300000
Refinance
4.155
4.125
USD
The Washington Trust Company
4.155%
4/16/2019
4.125%
at 0.000 pts
30 day lock rate
Est payment: $1,453.95
Fees in APR: $1,083
 
 
30 yr fixed mtg refi Mortgage Loan from United Bank
United Bank
300000
Refinance
4.276
4.250
USD
United Bank
4.276%
4/16/2019
4.250%
at 0.000 pts
30 day lock rate
Est payment: $1,475.82
Fees in APR: $911
 
 
30 yr fixed mtg refi Mortgage Loan from Liberty Bank
Liberty Bank
300000
Refinance
4.169
4.125
USD
Liberty Bank
4.169%
4/12/2019
4.125%
at 0.250 pts
60 day lock rate
Est payment: $1,453.95
Fees in APR: $814
 
 

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The rates above were collected by Bankrate.com on the dates specified. Rates are subject to change without notice and may vary from branch to branch. Rate/APR and terms may vary based on the creditworthiness of the individual and the extent to which the loan differs from the one used for Bankrate.com quotes. For criteria used in surveys of rates above, click here. These quotes are from banks, thrifts, and brokers, some of whom have paid for a link to their own Web site, where you can find additional information.






Their proposal was rejected but counterproposals were submitted, which is why 10 year U.S. bond yields are only down 2 basis points to 2.38 percent this morning. Greece needs more aid to prevent it from defaulting on its 1.6 billion euro debt at the end of the month. Lenders so far have refused to release funds to Greece unless more reforms are done.

Grexit Would Send Bond Yields and Mortgage Rates Plummeting


If Greece defaults at the end of the month equity markets will be in a freefall. As a result, bond yields would plunge in the classic flight-to-quality we have seen before when markets tumble. Bond yields move inversely to prices of bonds so as bond prices move higher, yields move lower. 10 year bond yields would fall back below 2.00 percent and might even break through the record low of 1.67 percent set in early 2013.

30 year mortgage rates would fall back below 4.00 percent and might also fall below the record average low of 3.34 percent set in early 2013. Conventional 15 year mortgage rates that are currently averaging 3.19 percent would fall below 3.00 percent and possibly break below the record average low of 2.56 percent.

Jumbo mortgage rates on 30 year loans currently averaging 4.35 percent would fall below 4.00 percent and towards 3.75 percent. 15 year jumbo mortgage rates averaging 3.19 percent would fall back below 3.00 percent and possibly as low as 3.50 percent.

If this scenario plays out, don't expect rates to stay low for long. Investors will eventually realize a Grexit from the Euro and possibly the European Union won't have a profound impact on the U.S. economy. At that point, equity markets will start rallying, bond yields will rise, and mortgage rates will move higher.

Outside of the Greek issue, the long term trend for bond yields and mortgage rates are higher. Yields and rates were driven to record lows the past 6 years as a result of the financial crisis, Great Recession, and the FOMC lowering the fed funds rate to a record low.

Direction of Mortgage Rates is Higher by the End of 2015


Now that the economy is back on its feet, interest rates have nowhere to move but higher. The FOMC is expected to increase the fed funds rate by 25 basis points in September, which would be the first increase in almost 10 years. While mortgage rates are not directly dependent on the federal funds rate, an increase will send bond yields higher, thus sending mortgage rates higher.

The FOMC is expected to do 2 or 3 interest rate increases in 2015. The most likely scenario are for 25 basis point increases for each. That would put the fed funds rate, currently in a range of zero percent to 1/4 percent, towards 0.50 percent to 0.75 percent by the end of the year.

As a result, 30 year conforming mortgage rates and 30 year jumbo rates would be between 4.75 percent to 5.00 percent. 15 year conforming mortgage rates would head towards 4.00 percent. 15 year jumbo mortgage rates would be around 4.50 percent.
 
Author: Brian McKay
June 24th, 2015