Mortgage Rate Forecast 2014 and 2015

The financial crisis of 2007 and the Great Recession in 2008 brought us the lowest mortgage rates in our lifetime. Mortgage rates today are slightly higher than the record lows but when you compare the past several decades, rates are still low. In 2014 and 2015 mortgage rates are forecast to move higher but the expected increases are not too much.

Historical Look at Average Mortgage Rates


Over the past three decades, average 30 year mortgage rates as reported by Freddie Mac have varied by over 15 percent. Late in 2012, average 30 year mortgage rates hit a record low of 3.35 percent.  Rates moved higher in 2013 but current rates are only about 1.00 percent higher.

Loan Type
Purchase    Refinance
Location
State/City    Zip Code
Loan Amt Points FICO % Down
  
$
30 yr fixed refi in 06101, All points, Credit score: 740+     Sort by:
Lender
APR
Rate
Cost & Fees
Notes
 
30 yr fixed Mortgage Loan from Ally Bank
Ally Bank
https://www.brimg.net/system/img/inst/10271_logo.gif
300000
Refinance
4.325
4.250
USD
Ally Bank Logo
at 0.100 pts
45 day lock rate
Est payment: $1,475.82
Fees in APR: $2,358
Thanks for the inquiry! 
 
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30 yr fixed Mortgage Loan from Sebonic Financial
Sebonic Financial
https://www.brimg.net/system/img/inst/8420_logo.gif
300000
Refinance
4.101
3.990
USD
Sebonic Financial Logo
at 0.100 pts
30 day lock rate
Est payment: $1,430.52
Fees in APR: $3,671
Thank you for your inquiry, we will be in touch shortly. 
 
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30 yr fixed Mortgage Loan from HomeDirect Mortgage
HomeDirect Mortgage
https://www.brimg.net/system/img/inst/10447_logo.gif
300000
Refinance
4.293
4.125
USD
HomeDirect Mortgage Logo
at 1.000 pts
30 day lock rate
Est payment: $1,453.95
Fees in APR: $2,964
 
 
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30 yr fixed Mortgage Loan from Ally Bank
Ally Bank
https://www.brimg.net/system/img/inst/10271_logo.gif
300000
Refinance
4.404
4.375
USD
Ally Bank Logo
at 0.000 pts
45 day lock rate
Est payment: $1,497.86
Fees in APR: $1,039
Thanks for the inquiry! 
 
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30 yr fixed Mortgage Loan from Sebonic Financial
Sebonic Financial
https://www.brimg.net/system/img/inst/8420_logo.gif
300000
Refinance
4.247
4.240
USD
Sebonic Financial Logo
at 0.000 pts
30 day lock rate
Est payment: $1,474.06
Fees in APR: $242
Thank you for your inquiry, we will be in touch shortly. 
 
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30 yr fixed Mortgage Loan from HomeDirect Mortgage
HomeDirect Mortgage
https://www.brimg.net/system/img/inst/10447_logo.gif
300000
Refinance
4.250
4.250
USD
HomeDirect Mortgage Logo
at 0.000 pts
30 day lock rate
Est payment: $1,475.82
Fees in APR: None
 
 
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30 yr fixed Mortgage Loan from Better.com
Better.com
https://www.brimg.net/system/img/inst/9722_logo.gif
300000
Refinance
4.125
4.125
USD
Better.com Logo
at 0.000 pts
30 day lock rate
Est payment: $1,453.95
Fees in APR: None
Thank you for your quote. 
 
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30 yr fixed Mortgage Loan from Sebonic Financial
Sebonic Financial
https://www.brimg.net/system/img/inst/8420_logo.gif
300000
Refinance
3.935
3.740
USD
Sebonic Financial Logo
at 1.100 pts
30 day lock rate
Est payment: $1,387.65
Fees in APR: $3,755
Thank you for your inquiry, we will be in touch shortly. 
 
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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 Santander Bank, N.A.
Santander Bank, N.A.
300000
Refinance
4.557
4.500
USD
Santander Bank, N.A.

4.557%
4/19/2019
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 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 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 Savings Bank of Danbury
Savings Bank of Danbury
300000
Refinance
4.397
4.375
USD
Savings Bank of Danbury

4.397%
4/19/2019
4.375%
at 0.000 pts
60 day lock rate
Est payment: $1,497.86
Fees in APR: $790
 
 
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 Citizens Bank, NA
Citizens Bank, NA
300000
Refinance
4.403
4.375
USD
Citizens Bank, NA

4.403%
4/19/2019
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 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 The Guilford Savings Bank
The Guilford Savings Bank
300000
Refinance
4.291
4.250
USD
The Guilford Savings Bank

4.291%
4/19/2019
4.250%
at 0.250 pts
60 day lock rate
Est payment: $1,475.82
Fees in APR: $719
 
 
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%
4/19/2019
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 Liberty Bank
Liberty Bank
300000
Refinance
4.169
4.125
USD
Liberty Bank

4.169%
4/19/2019
4.125%
at 0.250 pts
60 day lock rate
Est payment: $1,453.95
Fees in APR: $814
 
 
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 First National Bank of Omaha
First National Bank of Omaha
300000
Refinance
4.575
4.500
USD
First National Bank of Omaha

4.575%
4/19/2019
4.500%
at 0.625 pts
60 day lock rate
Est payment: $1,520.06
Fees in APR: $752
 
 

Mortage Data Provided by Bankrate.com Many lenders have different rates on their own Websites than those posted on Bankrate.com. In order to get the Bankrate.com rate, please identify yourself as a Bankrate.com customer. If you believe that you have received an inaccurate quote or are otherwise not satisfied with the services provided to you by the lender you choose, please click here.

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.





The record high for average 30 year mortgage interest rates in Freddie Mac's survey was 18.45 percent back in October 1981. This record high for mortgage rates was brought on by record high inflation, which in October 1981 was at 10 percent on an annualized basis. High inflation back in 1981 sent 10 year bond rates to over 15 percent, which in turn sent mortgage rates to record highs.

The higher point for 15 year mortgage rates as 8.80 percent in December 1994. Historical data from Freddie Mac on average 15 year mortgage rates only goes back as far as September 1991. If Freddie Mac had records for 15 year mortgage rates going back 30 years, average rates probably also hit double-digit highs in October 1981.

15 year mortgage rates hit record lows late in 2012 and have since moved about 1 percent higher. In December 2012, average 15 year mortgage rates in Freddie Mac's survey hit a record low of 2.66 percent. In April 2013, average 15 year rates tied the record low of 2.66 percent.

Mortgage Rate Forecast 2014 and 2015Average Conforming Mortgage Rates Today


Current average 30 year conforming mortgage rates this week are at 4.54 percent, up slightly from last week's average 30 year mortgage rate of 4.49 percent. While 30 year rates have been hovering around 4.50 percent, there are still many lenders quoting 30 year rates around 4.00 percent and slightly lower if you're willing to pay points to buy down the rate.

Mortgage rates on 15 year conventional mortgages are also higher this week over last. 15 year mortgage rates today are averaging 3.55 percent, up from the prior week's average 15 year rate of 3.48 percent. As with 30 year rates, there are many lenders quoting 15 year rates below the average. The lowest 15 year rates on our rate table are currently at 3.00 percent with 2 mortgage points.

Current Jumbo Mortgage Rates


In 2013, jumbo mortgage rates on both 30 year and 15 year mortgages also moved higher. The current average 30 year jumbo mortgage rate is at 4.63 percent, up from last week's average 30 year jumbo rate of 4.58 percent. The best jumbo rates available right now are around 4.00 percent with points.

15 year jumbo mortgage rates are currently averaging 3.92 percent, up from last week's average 15 year jumbo rate of 3.88 percent. The lowest 15 year jumbo refinance rates available are currently at 3.25 percent with points. Buying down a mortgage rate with points lowers your overall monthly mortgage payment.

Mortgage Rates Forecast for 2014


Now that we have a historical perspective of where mortgage rates have been and we know where current rates are, let's look into forecasts for average rates in 2014. The Mortgage Bankers Association has forecasted average 30 year mortgage rates will increase to 5.1 percent by the end of 2014.

If the MBA's forecast is correct, we are only looking at rates to increase another .50 percent for the entire 2014 calendar year. This is good news for the housing market, which has been recovering but is still on shaky ground.

2015 Forecast for Mortgage Rates


Moving onto 2015, average 30 year mortgage rates will continue to move higher but the increases will be even smaller. The MBA has forecasted average 30 year rates will increase to only 5.3 percent by the end of 2015, virtually flat with the 2014 forecast. Of course the MBA's forecast could be wrong, especially if economic growth really picks up and inflation becomes a concern.

The Federal Open Market Committee (FOMC) has released economic forecasts for the next several years and inflation isn't expected to be a concern. The PCE inflation rate for 2014 is forecasted to only be between 1.6 percent and 1.8 percent. In 2015 and 2016, the rate is only expected to be as high as 2.0 percent. Inflation remaining that low will keep a lid on any increases in bond rates and mortgage rates.

Higher Home Prices Will Help Many Homeowners Refinance


Only a slight increase in average rates are forecasted for 2014 and 2015 but continued higher home prices will help many homeowners refinance their mortgage. Since the housing bust, there are millions of homeowners who would like to take advantage of record low refinance rates but can't because they don't have enough equity built up in their homes. Home prices have increased a cumulative 20 percent the past two years and according to the National Association of Realtors, are expected to increase another 6 percent in 2014.

If you tried refinancing your mortgage in the past but didn't have enough equity, you should look into it again, especially if your current 30 year mortgage rate is 5.5 percent or higher. If your loan rate isn't 5.5 percent or higher, you may also want to consider refinancing to a shorter term mortgage.

15 year refinance rates can be found as low as 3.25 percent and refinancing to a shorter term loan will save you plenty of money. You can use a mortgage calculator to see the difference between a 30 year loan and a 15 year loan. Depending on the loan amount, you can save tens of thousands or even hundreds of thousands of dollars in accumulated interest.

Higher Mortgage Rates and Home Prices Make Now a Good Time to Buy


If you have been on the sidelines waiting to buy a home now is probably the best time in your lifetime. While mortgage rates are moving higher, the increases are only forecasted to be less than 1.00 percent over the next two years. This is good news but any increase in rates lowers the loan amount you can quality for.

Recent FHA changes to qualified loans have lowered the debt-to-income ratio from 45 percent to 43 percent. This means your monthly debt payments including your mortgage can't exceed 43 percent of your income. This rule change also lowers the amount you can borrow to buy a home.

The 20 percent increase in home prices for past two years combined with the expected 6 percent increase in 2015 means that with prices on the rise, there will be less home affordability in the near future.
Author: Brian McKay
January 6th, 2014