Compare Interest Only Mortgage Rates and Lenders

Mortgage rates continued their winning streak, remaining steady for the fourth consecutive week following the Federal Reserve's decision to leave interest rates unchanged at its July meeting.  The Fed pointed to low inflation as a counterbalance to an improved labor market as well as expanding household spending and business investment in its decision to maintain the target range for the federal funds rate at 1.000% to 1.250%.  Industry analysts had expected the Fed to stay put on interest rates at the July meeting so the decision has had relatively little impact on mortgage rates since the announcement.  A strong jobs report to open August failed to move rates higher as expected and instead key mortgage rates remained flat on the week and continue to hover near their low point for 2017.

The interest rate for a 30 year fixed rate mortgage held steady at 3.625% and jumbo mortgage rates also remained flat at 3.750%, while other mortgage programs followed suit.  The interest rate for a 15 year mortgage stayed put at 2.875% and the interest rate on a 5/1 adjustable rate mortgage (ARM) held at 2.750%, as lenders attempt to pull borrowers into shorter-term mortgage programs.  VA mortgage rates remained at 3.250%, matching FHA mortgage rates which were also steady at 3.250%, with both programs remaining enticing for home buyers seeking low or no down payment loan options.  Non-owner occupied mortgage rates were the sole mover on the week, dipping 0.125% to 3.750%.

After a turbulent first quarter of 2017, mortgage rates were relatively steady and attractive for much of the the second quarter.  As we move deeper into the third quarter, the Federal Reserve's decision to hold interest rates at their current level further stabilized the mortgage market.  Another week of flat rates means we are approaching multiple months of relatively stable and low mortgage rates that have brought increased certainty to the marketplace for both borrowers and lenders. 

Despite the relatively steady current mortgage market, mortgage rates remain highly challenging to predict.  The Fed’s decision to leave rates unchanged at its July meeting only bolsters the likelihood that the Fed will raise rates at a future meeting in 2017.  In fact, the Fed reaffirmed its outlook for another rate increase in 2017 and recent strong labor and economic reports, including a decline in the unemployment rate and robust jobs growth, reinforce the potential for a future rate hike.  Additionally, a Fed official recently reiterated the Federal Reserve's  intention to raise interest rates before year end despite continued low inflation.  Prospective borrowers looking to buy a home or refinance their mortgage may be able to lock in a lower interest rate by acting sooner rather than later, before mortgage rates increase, potentially at an accelerated pace.

Because interest rates change daily, we continue to actively monitor the mortgage market for changes.  Borrowers should check the FREEandCLEAR mortgage rate tables regularly to review customized, updated mortgage rates for lenders in their area.  Our rate tables are free to use and require no personal information.