Treasury Rates Trend Downward, but Don’t Expect Mortgage Rates to Follow

It is widely believed that the rate on the 30-year fixed rate mortgage tracks the 10-year Treasury bond. But with the latest downward trend in treasury and the mortgage rates not following the two rates may have become unhinged.

The typical homeowner with a 30 year note, lives in their home for 8 to 10 years hence why the two rates have been tied. However, when the Treasury rate falls, especially if the decline is rapid and sharp, the 30-year fixed rate mortgage seems to have trouble keeping up. The reason for its sluggishness is that investors face a greater risk of homeowners refinancing as rates plunge investors have to re-shuffle their portfolio..

Take away, if you are a buyer waiting to lock in your mortgage because you feel it will drop further. It may not be a wise decision.

New Online: Free HAMP Calculator

The U.S. Treasury Department has created a free tool for home owners to assist them in conducting a net present valuation (NPV) of their mortgage for the Home Affordable Modification Program (HAMP).

CheckMyNPV.com can be used by homeowners who have been denied a HAMP modification because of their NPV result.

You can start the process here.

If you would like to find out more on your home click here.