If you want to calculate Mortgage Rate Averages Calculators, here are 3 tips for comparing today’s rate to historical trends:
1. Understand what affects mortgage interest rates:
For fixed-interest mortgages, mortgage rates are affected by changes in the “yield” of Treasury securities. Treasury securities are bonds issued by the U.S. government for the purposes of paying national debt. When yields go up, so do mortgage interest rates – since the Treasury securities represent just a slightly-safer investment than do mortgages.
Meanwhile, for adjustable rate mortgages, mortgage rates are affected by the fed funds rate – which is set by the Federal Reserve and has to do with how much banks charge each other overnight loans.
2. Choose a type of mortgage whose rate you want to know more about:
Now, to get a better understanding of where rates are today, it is useful to get some context by looking at recent trends. Start by choosing a type of mortgage loan, such as a 30-year fixed (the most common type).
3. Look at 3-month, 1-year and 3-year trends:
Next, for the loan type you choose to research, look at 3-month, 1-year and 3-year trends. By doing so, you will get a sense for how these rates fluctuate over time and whether they are relatively high or low today as compared to those historical rates
Take these 3 tips into account as you get a better handle on mortgage rates in order to help you make a better decision about when would be a good time to move forward with your new mortgage.
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