Mortgage Interest Rates Mortgage Rates Widget

If you have been hoping interest rates would drop your prayers have been answered. Interest rates plummeted over half a point last week falling from 6.35 to 5.78. The last time mortgage interest rates fell this fast this quickly was the beginning of 1995 when rates fell from 8.32 to 7.57. Rates have basically fallen following the government takeover of Freddie Mac and Fannie Mae. Below are the rates for the major mortgage products for the last few weeks.

September 18, 2008
30-yr 5.78 15-yr 5.35 5-yr ARM 5.67 1-yr ARM 5.03

September 11, 2008
30-yr 5.93 15-yr 5.54 5-yr ARM 5.87 1-yr ARM 5.21

September 4, 2008
30-yr 6.35 15-yr 5.90 5-yr ARM 5.97 1-yr ARM 5.15

30 Year mortgage rates fell less this week (.15 points) compared to last week (.42 points). 15 year and 5 year arms both fell about .2 points this week. 1 Year arms which was the only major product to not fall last week fell .18 points this week. The other interesting point is that because interest rates were falling before the Fannie Mae and Freddie Mac takeover (based on rumors of the takeover) rates have fallen an incredible amount (.74 points for 30 year rates) over the last month and a half.

Ok so let's see what these drops mean as far as a mortgage payment. Using our mortgage calculator widget lets look at a payment based on a 200k loan. We will run the numbers based on today's mortgage rates and rates on September 11, September 4th and July 24th.

September 18th
30-yr $1170.96
15-yr $1618.29
5-yr ARM $1157
1-yr ARM $1077.31


September 11th
30-yr $1190.11
15-yr $1638.41
5-yr ARM $1182.43
1-yr ARM $1099.45

September 4th
30-yr $1244.47
15-yr $1676.92
5-yr ARM $1195.24
1-yr ARM $1092.05

July 24th
30-yr $1281.28
15-yr $1707.22
5-yr ARM $1219.75
1-yr ARM $1134.32

So the obvious thing to see here is that the now lower interest rates have had a large effect on mortgage payments. A mortgage with a 30 year interest rate dropped from 1281.28 to 1170.96 (9.1 percent) in the last month and a half. So that brings up the point that it's probably a good point to start looking at refinancing your mortgage even if you received a mortgage somewhat recently.

So what is in store for the market in the next few weeks? It's hard to tell but the market is very volatile. One day the stock market drops 400 points because Lehman Brothers goes bankrupt. Then the government proposes to takeover the bad mortgage debt and the market rises. Because of this volatility if you are thinking of refinancing I might lock in to an interest rate now because its hard to know what rates are going to be like in a few weeks.

Ki is a realtor down in Austin Texas. His website provides a search of the Austin MLS along with information on Austin Commercial Real Estate.

Mortgage interest rates moved down again this week. This marks the fifth week in a row where 30 Year mortgage rates have either fallen or held steady. This is of course good news for people looking to buy a house. This is also good news for the real estate market. A few weeks ago a weakened real estate market was dealing with additional burden of some of the highest mortgage rates we have seen in a year [mortgage rates graph]. Below are the mortgage rates for the major mortgage products for the last few months. As we can see while the 30 Year rate has fallen both the 5 year and the 1 year arm have for the most part held steady. This brings the difference between the 30 Year rate and the 5 year and 1 year arm back to roughly normal levels. The 15 year mortgage rate has been falling as well over the last month but not as much as the 30 year rate.

August 28,2008
30-yr 6.40 15-yr 5.93 5-yr ARM 6.03 1-yr ARM 5.33

August 21,2008
30-yr 6.47 15-yr 6.00 5-yr ARM 5.99 1-yr ARM 5.29

August 14,2008
30-yr 6.52 15-yr 6.07 5-yr ARM 6.02 1-yr ARM 5.18

August 7,2008
30-yr 6.52 15-yr 6.10 5-yr ARM 6.05 1-yr ARM 5.22

July 31,2008
30-yr 6.52 15-yr 6.07 5-yr ARM 6.07 1-yr ARM 5.27

While 30 mortgage rates have fallen they are still above what we saw a few months ago when mortgage rates where hovering around 6.0. So while mortgage rates are relatively high I still think this is a pretty good sign. Why? Basically mortgage rates have fallen in spite of the fact that recently the FED has decided not to lower rates. Does this mean that banks are feeling better about handing out mortgages? I would not go that far. If anything I would think that rates rose suddenly a month ago and simply overshot. And now they are simply reacting to that original large increase by moving down a bit. So let's look at what the mortgage rates mean for an actual mortgage. Using our mortgage calculator let's run through the numbers based on a 200k mortgage. We looked at what a mortgage would be this week plus a week and a month ago.

August 28th
30-yr $1251.01
15-yr $1680.15
5-yr ARM $1202.96
1-yr ARM $1114.33

August 21st
30-yr $1260.19
15-yr $1687.71
5-yr ARM $1197.81
1-yr ARM $1109.36

July 24th
30-yr $1281.28
15-yr $1707.22
5-yr ARM $1219.75
1-yr ARM $1134.32
So what is going to happen over the next few months? It's always hard to predict but here is my guess. I think rates will hold steady or fall a bit over the next two months. I am expecting rates to come down a bit after the election. Of course a lot could happen between now and then. If the market runs into more problems I would expect rates to increase. Why? The Fed has their hands tied behind the back they cannot lower the Fed rate too many more times.

Escapeso Austin Real Estate provides information on mortgage rates. They have a graph of historical mortgage rates along with a free mortgage calculator and a mortgage interest rates widget.

Mortgage Interest Rates Mortgage Rates Widget

Mortgage interest rates moved down slightly this week. This was a good sign since it was not preceded by any rate cuts from the FED. The 30 year mortgage rate fell from 6.52 to 6.47 and the 15 year mortgage rate fell from 6.07 to 6.00. For arms the 5 year rate fell from 6.02 to 5.99. The 1 year arm was the only one of the 4 rates to increase going from 5.18 to 5.29. If anything the mortgage rates are not more in align with each other. Over the past few weeks the difference between the 1 year arm and the other rates has seemed larger than normal.

To put this weeks changes in context of what has happened over this summer mortgage rates are still quite a bit higher than earlier. For the 30 Year mortgage on May 22 rates fell to 5.98. Then by July 24 rates raised to 6.63. So rates have fallen since then but we are still quite a bit higher than the rates we saw in May. Below are mortgage rates for the last few weeks.

August 21,2008
30-yr 6.47 15-yr 6.00 5-yr ARM 5.99 1-yr ARM 5.29

August 14,2008
30-yr 6.52 15-yr 6.07 5-yr ARM 6.02 1-yr ARM 5.18

August 7,2008
30-yr 6.52 15-yr 6.1 5-yr ARM 6.05 1-yr ARM 5.22

July 31,2008
30-yr 6.52 15-yr 6.07 5-yr ARM 6.07 1-yr ARM 5.27

July 24,2008
30-yr 6.63 15-yr 6.18 5-yr ARM 6.16 1-yr ARM 5.49

So let's see what these mortgage rates would mean for an actual mortgage payment. We ran today's mortgage rates through our free mortgage calculator for a 200k loan. We also looked at what the payments would have been on the same mortgage a week and a month ago.

August 21st
30-yr $1260.19
15-yr $1687.71
5-yr ARM $1197.81
1-yr ARM $1109.36

August 14th
30-yr $1266.76
15-yr $1695.28
5-yr ARM $1201.67
1-yr ARM $1095.75

July 24th
30-yr $1281.28
15-yr $1707.22
5-yr ARM $1219.75
1-yr ARM $1134.32

So what else is going on in the mortgage industry. First it looks like the government might take over Freddie Mac and Fannie Mae. A few months ago it was made clear that Freddie Mac and Fannie Mae would be protected while other smaller banks would be allowed to fail. Now with Freddie and Fannie running into serious financial problems (Freddie Mac stock has sank from 65.88 to 4.75). Oddly enough one of the problems Freddie Mac faces is that because the US government has made it clear Freddie Mac is too large to fall, investors are hesitant to give funds to Freddie Mac under the assumption that their investment will not be repaid following a government takeover.

So what will happen following the government takeover of Freddie Mac. Personally I think it will be positive. Over the last several months Freddie Mac has created a pretty large list of loans they will not provide backing for. This has hurt the ability of people to get loans and in turn has been one of the negative factors dragging down the national real estate market. If the government takes over Freddie Mac a lot of these restrictions will probably be pulled back. So while it won't magically cure all the problems with the national real estate market it will alleviate at least one of the negative factors weighting it down.

Ki works as a realtor in the central Austin real estate market. His site provides a search of the Austin MLS and a free mortgage calculator along with general information for buyers about Austin real estate.

For the second week in a row 30 year mortgage rates held steady at 6.52. 15 year mortgages last week moved from 6.07 to 6.1. The week they returned to 6.07. So basically the fixed rates are holding steady. 5 Year Arms fell from 6.05 to 6.02 and 1 Year Arms fell from 5.22 to 5.18. So they didn't move that much. But what is interesting is the overall trend. This week marks the 3rd week in a row that both 5 and 1 year arms have fallen. The 1 year arm has fallen from 5.49 to 5.18. This continues an overall trend of the difference between 30 Year Fixed mortgages and 1 Year growing. On May 1st 30 Year Arms were at 6.06 and 1 Year Arms were at 5.29. Mortgage rates since then have risen up to 6.52 while 1 Year arms have fallen to 5.18. The question of course is why banks are making arms (the mortgage product that is partly responsible for the high rate of foreclosures) more attractive. And I don't have an answer on that. Below are the mortgage rates for the last few weeks.

August 14,2008
30-yr 6.52 15-yr 6.07 5-yr ARM 6.02 1-yr ARM 5.18

August 7,2008
30-yr 6.52 15-yr 6.1 5-yr ARM 6.05 1-yr ARM 5.22

July 31,2008
30-yr 6.52 15-yr 6.07 5-yr ARM 6.07 1-yr ARM 5.27

July 24,2008
30-yr 6.63 15-yr 6.18 5-yr ARM 6.16 1-yr ARM 5.49

July 17,2008
30-yr 6.26 15-yr 5.78 5-yr ARM 5.80 1-yr ARM 5.10

As always I like to translate the mortgage rates into an actual mortgage payment. So using our free mortgage calculator below are what today's rates would translate into for a 200k mortgage. I also run the numbers based on what mortgage rates were at on May 1st.

August 14th
30-yr $1266.76
15-yr $1695.28
5-yr ARM $1201.67
1-yr ARM $1095.75

May 1st, 2008
30-yr $1206.82
15-yr $1643.73
5-yr ARM $1164.60
1-yr ARM $1085.89

On the one hand in general I am against arms. They are generally dangerous so I don't like to recommend them. But with such a wide gap between arms and traditional mortgages they are hard to ignore. If you do get an arm I would be prepared for your mortgage to jump substantially. For the most part I would consider an arm if you had enough money in savings to pay off the property if rates jumped up dramatically over the year.

The other factor to consider when getting a mortgage is credit scores. While for the first half of 2007 all one had to do to get a mortgage was show up at a bank over the last years banks have gotten a lot tighter. Additionally, interest rates now more than ever are tied to ones credit score. So if you are planning on buying a house sometime in the near future its a good idea to figure out what your credit score is now to make sure there are no outstanding debts or problems you need to fix.

Escapeso Realty provides current information on mortgage interest rates on their site. They also provide a free mortgage calculator and a mortgage rates widget.

Mortgage interest rates were virtually unchanged this week. The 30 Year rate stayed even at 6.52. The 15 year rate moved up a little from 6.07 to 6.10 and the 5 year arm moved down from 6.07 to 6.05. The only rate that moved much was the one year are which fell from 5.27 to 5.22. The one year Arm had the biggest fall last week as well. So in total for the last two weeks the 1 year arm has fallen from 5.49 to 5.22 while the other 3 major mortgage products have not fallen more than .11. Why the one year ARM is looking so good is another question. A high percent of the foreclosures the country is currently dealing with are from ARM based mortgages. So it seems odd to encourage ARMs when they are partially responsible with the current mess we are in. Of course the people in charge of the various mortgage companies didn't lose billions in shareholder wealth in just two years by making prudent decisions. So who knows what their current strategy is. Here are mortgage interest rates for the major mortgage products for the last few weeks.

August 7,2008
30-yr 6.52 15-yr 6.10 5-yr ARM 6.05 1-yr ARM 5.22

July 31,2008
30-yr 6.52 15-yr 6.07 5-yr ARM 6.07 1-yr ARM 5.27

July 24,2008
30-yr 6.63 15-yr 6.18 5-yr ARM 6.16 1-yr ARM 5.49

July 17,2008
30-yr 6.26 15-yr 5.78 5-yr ARM 5.80 1-yr ARM 5.10

July 10,2008
30-yr 6.37 15-yr 5.91 5-yr ARM 5.82 1-yr ARM 5.17


As always what do all these crazy numbers mean. To put these numbers in perspective lets see what these rates translate into for a mortgage on a 200k house.

August 7th
30-yr $1266.76
15-yr $1698.53
5-yr ARM $1205.53
1-yr ARM $1100.69

July 31th
30-yr $1266.76
15-yr $1695.28
5-yr ARM $1208.11
1-yr ARM $1106.88

July 24th
30-yr $1281.28
15-yr $1707.22
5-yr ARM $1219.75
1-yr ARM $1134.32


On the one hand I am usually pretty against ARMs. But a difference of 166.07 a month is pretty hard to ignore. If you are thinking of getting a 1 Year ARM this my advice. 1) Make sure you have 12 months of mortgage payments in a liquid account. 2) Watch the rates over the next year and wait for rates to come down a bit. If they don't come down and instead come up make sure you can afford to refinance at a higher rate. 3) this should be obvious from point one and two but if you are getting a 1 Year Arm dont get anywhere near your maximum loan amount. So if you are approved for a 300k loan it might be ok to get a 1 Year ARM if you are buying a house that is 150k-200k. If you are approved for a 300k loan and get a house for 280k get a 30 Year loan its simply not worth the risk. With an ARM your mortgage rate will simply start to flucuate after a year unlike a balloon where you are forced to refinance.

Escapeso Realty is a small brokerage in Austin Texas. Their site provides updated graphs on mortgage interest rates. They provide a free mortgage calculator along with a mortgage rates widget

Before we talk about what happened with mortgage rates this week lets do a quick recap of what happened last week. Last week mortgage interest rates made a sudden jump over the previous week. For the entire month of June and July 30 year mortgage interest rates fluctuated from 6.09 to 6.45. Then last week 30 year mortgage rates jumped from 6.26 to 6.63. At the time we predicted that rates would probably fall this week because usually after big spikes there is a bit of correction. We saw exactly that with all four of the major mortgage products falling, but not back to their levels from two weeks ago. 30 Year rates from 6.63 to 6.52. The only mortgage product to fall substantially this week was the 1 Year ARM. Last week the 1 Year rate rose from 5.10 to 5.49. This week the 1 Year mortgage rate lost most of that gain falling to 5.27. Below are rates for the major mortgage products for the last month.

July 31, 2008
30-yr 6.52 15-yr 6.07 5-yr ARM 6.07 1-yr ARM 5.27

July 24, 2008
30-yr 6.63 15-yr 6.18 5-yr ARM 6.16 1-yr ARM 5.49

July 17, 2008
30-yr 6.26 15-yr 5.78 5-yr ARM 5.80 1-yr ARM 5.10

July 10, 2008
30-yr 6.37 15-yr 5.91 5-yr ARM 5.82 1-yr ARM 5.17

July 3, 2008
30-yr 6.35 15-yr 5.92 5-yr ARM 5.78 1-yr ARM 5.17

Ok so mortgage interest rates tell part of the story. But how does this translate into a mortgage payment. Using our free mortgage calculator lets translate the mortgage interest rates over the last few weeks into a mortgage payment for a 200k loan.

July 31th, 2008
30-yr $1266.76
15-yr $1695.28
5-yr ARM $1208.11
1-yr ARM $1106.88

July 24th, 2008
30-yr $1281.28
15-yr $1707.22
5-yr ARM $1219.75
1-yr ARM $1134.32

July 17th, 2008
30-yr $1232.73
15-yr $1664.03
5-yr ARM $1173.5
1-yr ARM $1085.89

So it looks like for now rates are still relatively high. The only mortgage product that remains relatively low is the 1 year mortgage rate. Comparing it to the 30 Year mortgage rate at 6.52 the 1 Year mortgage rate is 5.27. For a 200k mortgage the mortgage payment with a 30 Year loan would be 1266.76. For a 1 Year Arm the mortgage payment would be 1106.88 or about 12.6% less. The only problem with 1 Year ARM's is that their is no guarantee mortgage rates will be less in one year. And with all the volatility in the mortgage markets right now they could be somewhat higher.

Ki works in Austin Texas as a realtor. His website provides information on mortgage interest rates along with a free mortgage calculator. Their is also graphs that show historical mortgage interest rates

After falling for most of the month of July Mortgage interest rates jumped up. And not only did they move up they jumped to the highest levels we have seen in 2008. 30 Year rates jumped from 6.26 to 6.63 last week. To put that in perspective for the entire month of May mortgage rates fluctuated between 5.98 to 6.08. The increases were not confined to 30 Year rates, 15 year rates went from 5.78 to 6.18, 5 Year Arms went from 5.80 to 6.16 and 1 Year Arms went from 5.10 to 5.49. The interest rates we saw this week for all the major 4 mortgage products were the highest numbers we have seen for all of 2008. When was the last time we saw mortgage rates this high? I looked back through 2007 to find the last time we saw rates this high for the different mortgage products.

30 year - August 2 , 2007
15 Year - August 16, 2007
5 Year - September 20, 2007
1 Year - December 27, 2008

Below are mortgage rates for the last few weeks.

July 24,2008
30-yr 6.63 15-yr 6.18 5-yr ARM 6.16 1-yr ARM 5.49

July 17,2008
30-yr 6.26 15-yr 5.78 5-yr ARM 5.80 1-yr ARM 5.10

July 10,2008
30-yr 6.37 15-yr 5.91 5-yr ARM 5.82 1-yr ARM 5.17

July 3,2008
30-yr 6.35 15-yr 5.92 5-yr ARM 5.78 1-yr ARM 5.17

June 26,2008
30-yr 6.45 15-yr 6.04 5-yr ARM 5.99 1-yr ARM 5.27

Ok so mortgage rates are one thing. But what does this mean for an actual mortgage. using our free mortgage calculator and pulling a number out of a hat we looked at how these rate increases would affect a 200k mortgage.

July 24th
30-yr $1281.28
15-yr $1707.22
5-yr ARM $1219.75
1-yr ARM $1134.32

July 17th
30-yr $1232.73
15-yr $1664.03
5-yr ARM $1173.5
1-yr ARM $1085.89

So starting off the monthly payment on a 200k mortgage with 30 Year loan would be $48.55 more this week compared to last (1232.73 to 1281.28). A 15 Year mortgage would have increased $43.19, a 5 year mortgage increased $46.25, and a 1 year mortgage would have increased $48.43.

So why have rates risen so dramatically. A few bank closures have probably caused some uncertainty in the market. Additionally the FED spent the early part of the year trying to keep rates down and basically ignoring the risk of inflation. That has changed as inflation signs have started to crop up. So now the FED is worried more about the risk of inflation.

So usually when one mortgage product rises I advise potential home buyers to look at the other mortgage products. But this week all the mortgage products rose more or less equally. Therefore my advice would be to start looking at putting down more cash. With interest rates moving up near 7 it might be a good idea to evaluate other investments and consider putting a large down payment on a house. If you are thinking of buying a house in the next few months its probably a good idea to start paying more attention to savings.

So what is going to happen next week? Usually after we see a sudden large increase or decrease the next week we see rates move a little bit in the opposite direction. But what happens with mortgage interest rates over the next week and the next few months to a large extent is going to be based on what happens with the banks and the mortgage industry and at this point with all the turmoil in the markets its a little hard to predict what is going to happen next.

Ki provides updated information on mortgage interest rates along with a mortgage interest rates widget. His site also provides a free mortgage calculator.

For the second week in a row mortgage rates have fallen. For those that don't read my updates regularly I wanted to give a short background on what rates have been doing. From the end of April to the beginning of June 30 year mortgage rates hovered around 6 percent. Then during the month of June 30 year mortgage interest rates rose peaking out at 6.45 at the end of June. But since then rates have fallen through the month of July ot 6.26. So we are not down to 6 but rates have come down quite a bit from their recent high. Its also interesting rates have fallen although the FED has cut the Fed Funds rate or the discount rate since April 30th. Below are mortage interest rates for the major mortgage products for the last 5 weeks.

July 17,2008
30-yr 6.26 15-yr 5.78 5-yr ARM 5.80 1-yr ARM 5.10

July 10,2008
30-yr 6.37 15-yr 5.91 5-yr ARM 5.82 1-yr ARM 5.17

July 3,2008
30-yr 6.35 15-yr 5.92 5-yr ARM 5.78 1-yr ARM 5.17

June 26,2008
30-yr 6.45 15-yr 6.04 5-yr ARM 5.99 1-yr ARM 5.27

June 19,2008
30-yr 6.42 15-yr 6.02 5-yr ARM 5.89 1-yr ARM 5.19

Mortgage rates are nice to look at but what do these mortgage rates flucatuations mean for a mortgage. Using our free mortgage calculator we can run the numbers and see how these mortgage rate changes would affect the mortgage on a 200k loan.

July 17th
30-yr $1232.73
15-yr $1664.03
5-yr ARM $1173.5
1-yr ARM $1085.89

June 26th
30-yr $1257.56
15-yr $1692.03
5-yr ARM $1197.81
1-yr ARM $1106.88

June 5th
30-yr $1210.69
15-yr $1650.11
5-yr ARM $1136.83
1-yr ARM $1080.98

For a 30 Year mortgage on June 5th the monthly mortgage payment would have been $1210.69. Three week later on June 26th a mortgage on the same amount would have risen 4% to $1257.56. Now another 3 weeks the mortgage payment has fallen 2% to $1232.73

The other major change occuring with mortgages is that banks are becoming more selective in giving out mortgages. We have noticed over the last month that more restrictions from lenders have been coming into play. So although mortgage rates are relatively low it has become more difficult to get a loan. Over the last few years lenders would give a loan to anyone that could walk in the door this has changed over the last year. This is why potential home buyers should start paying more attention to their credit scores. Also lenders are expecting larger downpayments. Lenders are also cracking down on investment loans. The biggest change has been that most lenders are not allowing borrowers to get more than 4 investment loans. This has essentially stopped many investors from purchasing new properties.

So what do we expect to happen in the future. The general feeling among mortgage brokers is that lenders are unlikely to return to the free wheeling style we saw in 2006. But at the same time its likely that the current extreme restrictions in lending might ease up some over the next six months.

Ki is a real estate agent in Austin. His website has current information on mortgage interest rates. Along with a free mortgage calculator and information on historical mortgage interest rates

So what has been going on in the world of finance and mortgages? Certainly the biggest news was the fall of IndyMac. Last week we heard that IndyMac had stopped giving out new mortgage loans and was going to concentrate on simply servicing the existing loans in its portfolio. Apparently this was due to the fact that regulators felt that IndyMac was not adequately capitalized.

Many experts speculated that the days of IndyMac were numbered and might not last the year. They were right and not only did they not make it through the year they didn't even survive the rest of the week. On Friday it was announced that IndyMac was seized by US banking regulators. This was preceded by a rush on the bank by panicked depositors. The insurance fund currently has around 53 billion so the failure of IndyMac should be a significant drain of the insurance fund. The failure of the bank should cost the government insurance fund between 4 to 8 billion.

Moving on what is going on with mortgage rates this month. After rates rose through the month of June rates have fallen off in the first 2 weeks of July. This is good news because the rates feel in spite of the FED choosing not to lower rates at their last meeting. Rates on all the major mortgage products (30 Year, 15 Year, 5 Year and 1 Year) from the week of June 26 to July 3. Then rates for the most part held steady from July 3rd to July 10th. Rates fell the most on 5 Year Arms.

Its interesting to note that the spread between 5 Year Arms and 30 Year fixed notes has increased over the last month making 5 Year Arms more attractive. Below are the rates for the major mortgage products for the last few weeks.

July 10, 2008
30-yr 6.37 15-yr 5.91 5-yr ARM 5.82 1-yr ARM 5.17

July 3,2008
30-yr 6.35 15-yr 5.92 5-yr ARM 5.78 1-yr ARM 5.17

June 26,2008
30-yr 6.45 15-yr 6.04 5-yr ARM 5.99 1-yr ARM 5.27

June 19,2008
30-yr 6.42 15-yr 6.02 5-yr ARM 5.89 1-yr ARM 5.19

June 12,2008
30-yr 6.32 15-yr 5.93 5-yr ARM 5.70 1-yr ARM 5.09

June 5,2008
30-yr 6.09 15-yr 5.65 5-yr ARM 5.51 1-yr ARM 5.06

Moving on lets look at mortgage payments. I like to translate mortgage interest rates into how they would affect a mortgage payment because at the end of the day that is what we are dealing with. So breaking out our free mortgage calculator lets see what these rates mean for a mortgage on a 200k house.

July 10th
30-yr $1247.08
15-yr $1678
5-yr ARM $1176.05
1-yr ARM $1094.51

July 3rd
30-yr $1244.47
15-yr $1679.08
5-yr ARM $1170.96
1-yr ARM $1094.51

June 5th
30-yr $1210.69
15-yr $1650.11
5-yr ARM $1136.83
1-yr ARM $1080.98

So what do we see happening over the next few months. At the beginning of the summer we felt rates would rise because the FED decided to stop cutting rates. Rates rose for a month and then recently have held steady and then felt a bit. Moving forward I don’t have a clear idea what will happen with rates. I would have thought rates might fallen but with the fall of IndyMac the mortgage industry does not seem to be stabilizing so its uncertain what will happen with rates over the next month.

Ki works in Austin. His site is filled with information about mortgage interest rates along with providing a free mortgage rates widget and a free mortgage calculator.

Mortgage Interest Rates Widget Mortgage Rate Trends

After rising drastically last week fixed mortgage interest rates moved up slightly this week. 30 Year notes moved from 6.42 to 6.45 and 15 Year notes moved from 6.02 to 6.04. ARMS on the other hand rose a decent amount. 5 Year Arms rose from 5.89 to 5.99 while 1 Year Arms rose from 5.19 to 5.27. Below are mortgage rates for the last few weeks.

June 26,2008
30-yr 6.45 15-yr 6.04 5-yr ARM 5.99 1-yr ARM 5.27

June 19,2008
30-yr 6.42 15-yr 6.02 5-yr ARM 5.89 1-yr ARM 5.19

June 12,2008
30-yr 6.32 15-yr 5.93 5-yr ARM 5.70 1-yr ARM 5.09

June 5,2008
30-yr 6.09 15-yr 5.65 5-yr ARM 5.51 1-yr ARM 5.06

May 29,2008
30-yr 6.08 15-yr 5.66 5-yr ARM 5.62 1-yr ARM 5.22

May 22,2008
30-yr 5.98 15-yr 5.55 5-yr ARM 5.61 1-yr ARM 5.24

Using our free mortgage calculator lets run the numbers on a 200k loan based on todays rates. We also put in what the mortgage would be a week and a month ago.

June 26th
30-yr $1257.56
15-yr $1692.03
5-yr ARM $1197.81
1-yr ARM $1106.88

June 19th
30-yr $1253.6
15-yr $1689.87
5-yr ARM $1184.99
1-yr ARM $1096.98

May 29th
30-yr $1209.4
15-yr $1651.19
5-yr ARM $1150.68
1-yr ARM $1100.69

So looking at the numbers above one would have saved almost $50 by getting a 30 Year loan a month ago compared to today. In contrast a mortgage on a 1 Year Arm has remained relatively constant. Why Banks would want to promote 1 Year Arms is anyones guess. Based on the other recent decisions by banks it would not be a bad assumption to assume banks have no idea what they are doing this point.

At this point getting a 5 Year Loan doesnt really seem worth it compared to getting a 30 Year loan since the cost savings is not that high (5%). On the other hand if you plan on keeping the property for a short period of time a 1 Year loan seems attractive considering the cost savings(12%).

Ki lives in Austin. His website has information on Austin real estate along with search of the Austin MLS and market stats on his Austin real estate blog.

Mortgage Interest Rates Historical Mortgage Rates

Mortgages rates fell this week for 30 Year loan (6.01 to 5.98) and 15 year rates (5.6 to 5.55). Rates on 5 and 1 year arms increased (5.57 to 5.61 and 5.18 to 5.24) respectivly. Another interesting point is that 30 Year rates have now fallen for 4 weeks in a row which is an encouraging sign although it would be nice to have seen rates fall a little more.

May 22,2008
30-yr 5.98 15-yr 5.55 5-yr ARM 5.61 1-yr ARM 5.24

May 15, 2008
30-yr 6.01 15-yr 5.60 5-yr ARM 5.57 1-yr ARM 5.18

May 8, 2008
30-yr 6.05 15-yr 5.60 5-yr ARM 5.67 1-yr ARM 5.29

May 1, 2008
30-yr 6.06 15-yr 5.59 5-yr ARM 5.73 1-yr ARM 5.29

So what would these rates translate into for a mortgage. Using our free mortgage calculator lets run some numbers.

Using our free mortgage calculator lets run the numbers on a 200k Loan

May 15th
30-yr $1196.53
15-yr $1639.47
5-yr ARM $1149.41
1-yr ARM $1103.16

May 15th
30-yr $1200.38
15-yr $1711.46
5-yr ARM $1144.37
1-yr ARM $1095.75

At this point I would still favor a 30 Year loan over an arm. But getting an arm over a 30 Year arm you would only save $47.12 which considering rates will probably be higher when the loan resets does not really seem worth it.

Ki works with buyers and sellers in the Austin real estate market. His site has a free search of the Austin MLS along with information on his Austin real estate blog.

You would probably have to have been living on a remote desert island for the better part of two years to not see any signs of the slowdown in the economy of the United States. Since August of 2007, the real estate market has been reeling from plummeting house prices, due primarily to increasing defaults on sub-prime mortgages. While these mortgages were issued to millions of borrowers with patchy or relatively poor credit ratings over the past several years, interest rates remained unusually low before the Federal Reserve began to increase rates over 2005-2006.

Up until late 2006, this process was self-reinforcing, mainly due to the delayed impacts of interest rate changes, not to mention encouraging profits for lenders, who would often repackage the loans into securities which could be sold to investors globally. Many analysts called it a new era in risk management, justifying the arcane nature of many of these new investment entities with ever-larger profits.

But just as higher interest rates began to take their deflationary effects on the larger economy, millions of sub-prime mortgages began to reset, their rates immediately dependent on available credit. Moreover, many borrowers were not made aware of the insidious nature of their home loans.

Often, their interest rates are artificially low for some period of time, usually one to two years, and then change to reflect market rates afterward. These "teaser" rates were designed to lure more potential homeowners, and they worked: all estimates of the amount of sub-prime mortgages number in the millions, and many consumer advocacy groups have decried the skyrocketing incidence of "predatory loaning" leading up to the credit crunch. Defaults have continued to increase, which has forced the financial institutions which invested in mortgage-backed securities to write down billions, eventually leading to the spectacular collapse earlier this year of Bear Stearns, formerly Wall Street's fifth-largest investment bank.

Since the securities made from these increasingly worthless mortgages have been so widespread, any effort towards recovery must first be focused on stabilizing borrowers, who are increasingly behind on payments. In this respect, the government has taken several different courses of action. In an effort to stop unnecessary foreclosures, the US Treasury has begun an initiative to freeze mortgage payments at current levels for qualified recipients. However, its restrictions make less than 5% of homeowners eligible for the program.

In addition, the Treasury has introduced a plan to reorganize and regulate the lending industry over the next several years, which should help streamline the financial system in the future. However, its greatest effect so far has been to distract from more immediate economic problems.

By far, the greatest player in the recovery effort has been the Federal Reserve, which reversed its previously hawkish view to drop mortgage interest rates multiple times, from 5.25% last summer to 2.25% now, with a further cut of 25 basis points highly likely at the next meeting. They have also taken the unprecedented move of making its "discount window" rate loans available to investment banks. This access has historically only been available for commercial banks up until this point as a matter of last resort, but by bailing out Bear Stearns, the Fed made a commitment to help troubled investment banks weather the credit crisis. A recovery will require a combination of liberal monetary policy, further government intervention on behalf of mortgage holders, and enforceable regulation in order to prevent another bubble.

Ki is a real estate agent in Austin Texas. He runs a site filled with information about Austin real estate. His site provides information on mortgage interest rates along with a search of the Austin MLS.

Mortgage Interest Rates Historical Mortgage Rates

So what happened with mortgage interest rates this week? Not much. For the second week in a row mortgage rates pretty much stayed the same.

May 8, 2008
30-yr 6.05 15-yr 5.60% 5-yr ARM 5.67 1-yr ARM 5.29

May 1, 2008
30-yr 6.06 15-yr 5.59% 5-yr ARM 5.73 1-yr ARM 5.29

April 24th, 2008
30-yr 6.03 15-yr 5.62% 5-yr ARM 5.68 1-yr ARM 5.29

April 17th, 2008
30-yr 5.88 15-yr 5.40% 5-yr ARM 5.48 1-yr ARM 5.10

Using our free mortgage calculator lets take a look at what the mortgage payment would be for a 200k loan. The mortgage payment is $1.29 less than what it would have been last week. Considering that the FED cut rates I was a little dissappointed. I was hoping for rates to drop a little more this week.

May 8th, 2008
30-yr $1205.53
15-yr $1711.46
5-yr ARM $1157
1-yr ARM $1109.36


May 1st, 2008
30-yr $1206.82
15-yr $1643.73
5-yr ARM $1164.60
1-yr ARM $1085.89

At this point I don't expect rates to drop in the near future. The FED basically said at the last meeting that they didnt plan on making any more rate cuts. So until banks start to develop a more positive outlook on the economy I would not expect rates to come down any more. So if you are thinking of doing a refi or locking in an interest rate on a house this might not be a bad time.

Ki works as an Austin realtor helping clients look for homes in the Austin Texas real estate market. His site provides a free search for Austin homes.

Current Mortgage Rates

May 1, 2008

30-yr 6.06 15-yr 5.59% 5-yr ARM 5.73 1-yr ARM 5.29

April 24th, 2008
30-yr 6.03 15-yr 5.62% 5-yr ARM 5.68 1-yr ARM 5.29

April 17th, 2008
30-yr 5.88 15-yr 5.40% 5-yr ARM 5.48 1-yr ARM 5.10

April 10th, 2008
30-yr 5.88 15-yr 5.42% 5-yr ARM 5.56 1-yr ARM 5.19

Not much changed with mortgage rates over the last week. 30 Year and 5 Year ARM's went up a tad and 15 Year Mortgages came down a bit. These rates were collected right before the FED cut interest rates they might fall a little more.

So lets see what these rates would mean for a 200k loan. Using our free mortgage calculator.

April 24th, 2008
30-yr $1202.96
15-yr $1646.93
5-yr ARM $1158.26
1-yr ARM $1085.89

May 1st, 2008
30-yr $1206.82
15-yr $1643.73
5-yr ARM $1164.60
1-yr ARM $1085.89


Ki is a realtor in Austin. He runs a site about Austin Texas real estate which hosts a free search of the Austin Homes along with a Austin real estate blog.

On April 30th, the Federal Reserve announced a cut in their main interest rate by 25 basis points, to 2% from 2.25%. This is the seventh such cut by the US central bank since the beginning of the credit crunch some eight months ago, totaling 3.25% in cuts to the key rate that banks charge each other for overnight loans. These cuts have been made in an attempt to lower mortgage rates to help bolster the real estate market. As the fragile US economy staggers towards recovery, two major agents are working against American consumers: record inflation in food and energy. What can we expect in the future for these troubled yet lucrative markets?

In the short term, volatility will probably continue to dominate, but in the middle term inflation may take precedent over combating the slowdown, both for the central bank and regular consumers. Just as the Fed began to cut interest rates, the dollar's 5-year slide accelerated, pushing commodities that are priced in dollars like oil down relative to other currencies. This self-reinforcing process means that their futures markets are cheaper to buy in other currencies, which has led to a massive increase in speculation by flustered investors looking for a safe haven for their assets.

If the Fed were to continue to cut interest rates further, this process could keep consumer spending, which accounts for two thirds of the US economy, tamped down for some time. In March, spending only increased more than projected (0.4%) because of highly inflated energy and food costs. In addition, businesses have continued to feel the pinch of higher secondary costs that affect many other prices, even as output continues to fall. Nevertheless, the strong March activity index from the Institute for Supply Management was still stronger (48.6, with 50 meaning zero growth) than many economists had expected, implying some underlying resilience.

The lingering question remains: what is the Federal Reserve doing by cutting an inter-bank interest rate? It appears now that they are stoking inflation through price distortion, if the positive effects thereof (some stabilization of the troubled financial sector) is ignored. By making dollars cheaper, the value of oil and food is cheapened and necessarily must rise accordingly. Now exchange rates between the dollar and the euro have statistically matched fluctuations in oil prices for 52% of the last six months, compared to less than 1% for the years between 1999 and 2004. Investors and speculation have turned commodities into a superb place to dump cash, but such simplistic reasoning should be setting off alarms in the wake of the credit crunch.

In Washington and abroad, few have challenged the Fed's decisions, which have not been as noticeably correlated to price increases until recently. That may change as eurozone inflation remains stubbornly above target levels, mostly because the European Central Bank takes energy and food into its purview. While the Fed are still supposed to fight inflation first, their smaller focus means that their culpability is limited. As the election looms over Ben Bernanke's head, he is likely receiving pressure to stabilize first and ask questions later. However, a housing bubble and top-teir mismanagement led to the credit crunch now dragging down global growth. No one is looking to repeat this experience, especially because a commodity bubble is surely the worst kind.

Ki has a site dedicated to covering Austin Texas real estate. His site provides a graphical search of the Austin MLS for visitors along with providing up to date commentary on his blog about Austin real estate.

When thinking about the economic slowdown now gripping the United States, one might think of the naked emperor of yore, who could not realize his condition until told by a child. By the time analysts and the White House recognize the extent of the credit crisis, its effects will probably not be noticeable. So where are we now? Several times since last August's signs of an imminent drop in growth, markets have rallied due to speculation that problems in the area of sub-prime mortgages have "bottomed out." Alas, thus far it appears to have been in vain.

On April 25th, Reuters and the University of Michigan reported in their Survey of Consumers that consumer sentiment fell ever deeper in April to settle at 62.6 from 69.5 in the preceding month. Not only is this the third straight month that consumer's outlooks have remained downbeat, but this month's ratings are the lowest in 26 years. The last time consumers' finances were as stressed was in 1982, which was due to the "stagflationary" economy of the time. Stagflation refers to a stagnating economy with low or limited growth prospects coupled to high inflation. The recent recession came from a different set of circumstances, but consumers are feeling the pinch all the same. While inflation remains a key factor for monetary policy makers and politicians, estimates of core inflation (which excludes volatile food and energy prices) remain low for now.

This is a good thing, because it has allowed the Federal Reserve a lot of leeway regarding monetary policy. They have cut the interest rate they charge for lending to commercial banks by nearly three full percentage points since the onset of the credit crunch last summer, and are poised to cut rates 25 further basis points at their next rate-setting meeting April 30th. However, interest-rate futures contracts also predict a 20% chance that they may not cut the rate at all, signaling a possible end to further monetary stimulus. It is unclear whether inflationary concerns or macro-economic stability is guiding the Fed's decisions because, since rate cuts began, food and energy prices have also skyrocketed.

While this doesn't normally affect core inflation to a significant degree, over a protracted period of time prices will continue to increase for everyone. In addition, the Treasury's stimulus package is set to begin arriving to millions of American consumers at the end of April, four days ahead of schedule. The Bush administration and other prominent authorities have touted the $152 billion influx as a means to increase spending, which accounts for two-thirds of the US economy. While consumer spending should begin to pick up somewhat, surveys have shown that many people plan to spend their check one of two ways: relieving personal debt (which reached epic proportions in 2007), or adding to savings. This reflects both how necessary a lump sum of cash is to many poor Americans, and how much spending has been curbed. Until spending picks back up, the service sector will continue to ache. Promising numbers in manufacturing orders for April also reflect strong fundamentals, even as the housing and construction industries continue to slump It may be presumptuous to assume that the US is out of the proverbial woods, but there may yet be light at the end of the tunnel.

Ki lives in Austin and works as a real estate broker in the Austin real estate market. He provides a free search of the Austin MLS on his website along with information on mortgage interest rates.

Mortgage Interest Rates Free Mortgage Rates Widget

April 24th, 2008
30-yr 6.03 15-yr 5.62% 5-yr ARM 5.68 1-yr ARM 5.29

April 17th, 2008
30-yr 5.88 15-yr 5.40% 5-yr ARM 5.48 1-yr ARM 5.10

April 10th, 2008
30-yr 5.88 15-yr 5.42% 5-yr ARM 5.56 1-yr ARM 5.19

April 3rd, 2008
30-yr 5.88 15-yr 5.42% 5-yr ARM 5.59 1-yr ARM 5.18

After holding steady for a few weeks it looks like current mortgage interest rates have increased pretty much across the board. Most of the mortgage products increased by about .2 points except for 30 Year Rates which increased by .15 points. Compared to mortgage rates for the last 2 years rates are still relatively low.

So what does this mean for mortgage payments. Lets look at what these rates would mean for a loan of 200k. Using our free mortgage calculator lets take a quick look.

April 17th, 2008
30-yr $1183.71
15-yr $1623.57
5-yr ARM $1133.06
1-yr ARM $1109.36


April 24th, 2008
30-yr $1202.96
15-yr $1646.93
5-yr ARM $1158.26
1-yr ARM $1085.89

Because 30 Year rates did not increase as much at rates on ARMs I would still recommend getting a 30 Year loan instead of an ARM. Mostly because I expect rates to increase so when an ARM expires the note holder will probably have a higher rate.

Ki is a realtor in Austin. He runs a site about Austin real estate which has a search of the Austin MLS along with market analysis on his Austin real estate blog

In Greek mythology, the hydra was a beast that, when one of its many heads were severed, would grow new heads in their place. The sub-prime mortgage crisis has developed in a similar fashion, initially appearing to be constrained to a sector of unworthy credit borrowers who likely didn't have the financial ability to own a home normally. However, this expected loss translated into falls in construction, consumer spending, and widespread mortgage defaults in prime markets. This hydra doesn't respond well to lip service, such as the interest rate freezing plan ushered in by the US Treasury which is constrained to a statistically small minority of distressed homeowners.

Yet the knock-on effect of the sub-prime crisis that has gotten the most attention is relatively removed from those experiencing foreclosure: the financial sector, overexposed and reeling from massive writedowns due to investment in securities backed by these same sub-prime mortgages. However, both sides of this crisis can be traced to the changing relationship between monetary policy and reality. Real interest rates, those which banks charge each other for overnight lending, have remained stubbornly above their historical highs, reflecting the reluctance of banks to let go of needed capital. Consumer confidence is at its lowest level since the statistics were taken, asserting the credit crunch's diffusion into the larger economy. With such widespread signals of an economic downturn, the Federal Reserve has been the focus of many investors, especially after the unprecedented bailout of troubled investment bank Bear Stearns.

When the Fed lowers their discount rate, the cut is generally assumed to filter throughout the financial system, making loans cheaper for everyone and stimulating the economy. The US central bank has also not shied away from its ability to auction funds, which it has done liberally in order to stem further liquidity issues. While banks have taken advantage of more cheaper money, they have not passed all those savings on to others, and mortgage interest rates while low remain higher than would be expected. These rates affect both the returns on stocks for investors all over the world, but also rates for other loans from mortgage payments to fundraising efforts to buy up the troubled derivatives that began wreaking havoc on balance sheets a year ago. If the Fed is to maintain its credibility as a viable beacon of stability, then they will need to rein in with regulation further in the future or risk losing their legitimacy: that inflation remains within target levels, if on the high end of the spectrum. Until banks are completely through writing down losses, lending is not likely to get much cheaper. In fact, with plenty of investors jumping ship to profitable commodities, raising capital for necessities like student loans are going to be harder to come by. Analysts have projected that 10% of the lowest bracket of previous year's accepted borrowers expected not to qualify under recently tightened standards. Interest rates will reap an unprecedented level of control over the livelihoods of millions of Americans to an extent seldom seen.

Ki is a realtor/broker in Austin Texas working with homebuyers in the Austin real estate market. His site provides users a free graphical search of the Austin MLS along with a free mortgage calculator.