Mortgage interest rate movements on this week's Bankrate.com weekly national survey followed the conventional wisdom about the effect of the euro crisis on American interest rates. As doubt persisted over whether the stronger members of the euro zone would actually put together a deal that avoided a Greek default and shored up the currency, money flowed into American bonds, sending US interest rates downward again. After staying calm last week, mortgage interest rates fell on the Bankrate.com weekly survey for the week ending Oct. 26. The benchmark rate for a 30-year fixed-rate mortgage dropped 5 basis points to 4.33%, the benchmark rate for a 15-year fixed-rate mortgage slipped 1 point to 3.57%, and the benchmark 5-year ARM rate fell 2 points to 3.22%.
This morning's news of a euro bailout deal should send US stock markets and interest rates higher simply because it removes the uncertainty that had hung over the matter. A sustained stock rise, in turn, will likely negate the prediction that rates will hold steady made by the plurality of lenders surveyed for the Mortgage Rate Trend Index. The figures for this week's predictions also reflected the uncertainty: while 42% said rates would remain unchanged in the coming week, the majority of lenders - 58% - were evenly split between predicting they would rise and saying they would fall (29% each).
Even if rates rise, however, it is likely that mortgage applications will also once new rules governing eligibility for the government's Home Affordable Refinance Program take effect in mid-November. The rules remove the 125% cap on mortgage balances, thus making more borrowers eligible for the program as long as they are current with their mortgage payments. Even so, not all such borrowers may be able to get refinance loans, depending on the details of the new rules.
Today's mortgage rates lower on Bankrate, mixed on Zillow
The overnight surveys continued to send mixed signals about the direction of mortgage interest rates, with rates lower across the board on the Bankrate.com overnight survey and mixed for the day but higher for the week on the Zillow.com survey.
Yesterday's average afternoon mortgage rates on the Zillow.com National Mortgage Marketplace, with changes from Tuesday and Oct. 21, are: 30-year fixed, 3.95% (-5 points, unchanged); 15-year fixed, 3.35% (unchanged, +5 points); 5-year ARM, 2.82% (-1 point, +2 points). Today's real-time rates as of 8 a.m., with changes from yesterday morning and afternoon, are: 30-year fixed, 3.95% (+3 points, unchanged); 15-year fixed, 3.31% (-2 points, -4 points); 5-year ARM, 2.76% (+4 points, -6 points).
This morning's average mortgage rates on the Bankrate.com overnight survey, with changes from yesterday and one week ago, are: 30-year fixed, 4.16% (-4 points, -1 point); 15-year fixed, 3.45% (-2 points, -1 point); 5-year ARM, 3% (-2 points, -3 points).
One basis point equals one hundredth of a percentage point. Rates reported in this article assume good credit (FICO score of 650 or higher) and a 20% down payment. Morning rates from Zillow.com are for loans for the most creditworthy borrowers (FICO score of 720 or higher).