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Mortgage Rates compared to Ten Year Treasury Yield and Refinance Activity

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In fact, this week, the 30-year fixed rate mortgage edged upward, and the 10-year treasury yield rebounded sharply, according to Freddie Mac’s Primary Mortgage Market Survey released Thursday.

We believe Capstead Mortgage will be a major beneficiary, as compared. activity in the U.S. housing markets, driven by attractive mortgage rates and home prices, higher refinancing and rising rents.

How ARM rates work: 3/1, 5/1, 7/1 and 10/1 mortgages 3 Year Adjustable Rate Mortgage – 30-year loan term – 3 years fixed, with rate changes every year after the fixed period. 5 year adjustable Rate Mortgage – 30-year loan term – 5 years fixed, with rate changes every year after the fixed period.

While it seems that the 30-year mortgage rate should be based on the 30-year Treasury, the effective term of a 30-year mortgage, or mortgage-backed security, averages seven to 10 years. With a mortgage, a portion of principal is paid off each month, and homeowners often sell or refinance to pay off home loans early.

The yield on the 10-year Treasury. “Mortgage applications surged last week, with refinance and purchase activity both showing impressive weekly and year-over-year gains,” said Bob Broeksmit, MBA.

To get an idea of where 30-year fixed rates will be, use a spread of about 170 basis points, or 1.70% above the current 10-year bond yield. This spread accounts for the increased risk associated with a mortgage vs. a bond. So a 10-yr bond yield of 4.00% plus the 170 basis points would put mortgage rates around 5.70%.

The yield on the 10-year bond. 3 percent. The refinance share of mortgage activity accounted for 40 percent of all applications. “Despite the weekly decline, purchase activity did muster a small.

A 10-year fixed-rate mortgage maintains the same interest rate and monthly payment over the 10-year loan period. A 10 year fixed-rate mortgage allows the borrower to pay off the mortgage faster and typically has a low interest rate. But monthly payments are higher than with fixed rate mortgages that have longer terms.

Mortgage Rates compared to Ten Year Treasury Yield and Refinance Activity. Currently the 10 year Treasury yield is at 2.72% and 30 year mortgage rates are at 4.39% (according to freddie mac). based on the relationship from the graph, the 30 year mortgage rate (Freddie Mac survey) would be around 5% when 10-year Treasury yields are around 3.33%.

On January 1st the consensus forecast of the 66 most senior economists for the year end 10-year US Treasury yield. mortgage backed securities need to protect themselves against pre-payment risk. As.

Mortgage loan rates for a top-tier 30-year fixed-rate loan fell from 3.92% to 3.8% last week, according to Mortgage News Daily. As of Tuesday night, top-tier borrowers were paying 3.79% for that loan.