Mortgage Rates Move Up Slightly

Mortgage Rates moved up slightly this week. The 30 year rate moved up the most going from 5.07 to 5.15. The other three major mortgage products (15 year fixed, 5 year ARM and 1 year ARM) all moved up less the .05 points. What is interesting is this makes the other mortgage products all more viable. For the last few months it seemed that the 30 year mortgage was the only product worth considering. While that still remains the case the 5 and 1 year ARMs are moving closer to being relevant. The 15 year fixed mortgage is a pretty attractive option at 4.72. This is .43 points lower than the 30 year mortgage. A month ago it was .33 points less than the 30 year mortgage.

The 5 year ARM is now 5.08 so while the difference between it and the 30 year doesn't make it an attractive option we might start seeing some activity again with the 5 year arm if the difference grows to over .3 points. Personally with interest rates this low I would not consider the 5 year ARM unless the difference between it and the 30 year mortgage was greater than .6 points. It's simply too attractive to lock in for a long period of time with historically low rates. Below are rates on the major mortgage products from February 5 to March 5.



Mar 05, 2009

30-yr 5.15 15-yr 4.72 5-yr ARM 5.08 1-yr ARM 4.86


Feb 26, 2009

30-yr 5.07 15-yr 4.68 5-yr ARM 5.06 1-yr ARM 4.81



Feb 19, 2009

30-yr 5.04 15-yr 4.68 5-yr ARM 5.04 1-yr ARM 4.80



Feb 12, 2009

30-yr 5.16 15-yr 4.81 5-yr ARM 5.23 1-yr ARM 4.94



Feb 05, 2009

30-yr 5.25 15-yr 4.92 5-yr ARM 5.26 1-yr ARM 4.92



In addition to rates let's look at mortgage payments. We took today's rates and translated them into mortgage payments for a 200k loan. We also translated rates from February 5th and February 26th. As we can see after falling rapidly rates and their corresponding mortgage payments for the last month have remained pretty steady.



Mar 05
30-yr 1092.05

15-yr 1552.56

5-yr ARM 1083.44

1-yr ARM 1056.59



Feb 26

30-yr 1082.21

15-yr 1548.44

5-yr ARM 1080.98
1-yr ARM 1050.53



Feb 05

30-yr 1104.4

15-yr 1573.26

5-yr ARM 1105.64

1-yr ARM 1063.88

So what is going to happen over the next month and the next 2 years? The second question is easier. I expect over the next two years that mortgage rates will rise. It's hard to know how much they will rise but some people expect mortgage rates to jump to 10-13 percent. It's a little harder to determine what rates are going to do over the next month. It seems that unless the economy makes an unexpected recover the 30 year rate will stay below 5.5. The last question is what the government will do. There have been plans for the government to unveil a 4.5 interest rate for new home buyers. But we will have to wait to see if that program will come out and what kind of restrictions will be attached to the 4.5 interest rate.



Article Source: the-Articles.com


About the Author
Author: dane
Ki works in Austin




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