No Fed Rate Hike is Good News for Mortgage Rates

If you haven't heard the news, the Federal Open Market Committee declined to raise the fed funds rate list week. This is good news for those looking to buy a home or refinance a mortgage, as current mortgage rates will stay near record lows for now.

Mortgage rates are not directly tied to the federal funds rate but indirectly tied. When the federal funds rate is increased, bond yields usually increase. Lenders tie mortgage rates to 10 year bond yields, as 10 year bond yields rise, lenders adjust mortgage rates higher.

30 year fixed conforming mortgage rates are currently at 3.51 percent, up from last week's average mortgage rate of 3.46 percent. 30 year rate moved higher last week but are only about 25 basis points above all-time record lows set a few years ago.

A decade ago, 30 year mortgage rates were in the 6 to 7 percent range. Back in the early 1980's the all-time record high for 30 year mortgage rates was just above 17 percent.

Average 30 year rates are at 3.51 percent today but there are lenders quoting 30 year rates well below the average. The best 30 year refinance rates on our rate list right now are at 3.00 percent with points. The best rates without points are still below the average at 3.25 percent.

Mortgage points allow the borrower to get a lower mortgage rate by paying money up front. Each mortgage point is equal to 1 percent of the loan amount.

To see how low mortgage rates are in your area search our rate lists at

Loan Type
Purchase    Refinance
State/City    Zip Code
Loan Amt Points FICO % Down
in 06101, All points, 740    Sort by:
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Author: Brian McKay
September 25th, 2016