Compare Jumbo Mortgage Rates and Lenders
Review current jumbo mortgage rates for August 18, 2018 and get personalized mortgage quotes from top lenders
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Mortgage Rates by Loan Product
Mortgage Rate ReportSaturday, August 18, 2018
Mortgage rates dipped lower for the second consecutive week after the Federal Reserve decided to keep interest rates unchanged at its August meeting. Although the Fed's statement reflected its more aggressive rate strategy, its move to stay put was widely expected after its June hike. The Fed's concise statement highlighted a strengthening economy including a strong labor market, household spending and business investment. Although some could interpret the use of more hawkish language as paving the way for future interest rate hikes, the mortgage market responded positively to the Fed's decision to hold the target Federal Funds rate at 1.750% to 2.000%.
Bullish telegraphing from the Fed as well as a string of favorable economic news had pushed mortgage rates higher for much of the summer but rates have pulled back the past two weeks, which is positive news for borrowers. Rates dipped last week on the news that the Fed left interest rates unchanged and slid again this week as turmoil in the global currency market led investors to buy U.S. treasuries, pushing yields lower. Lower treasury yields usually translates into lower mortgage rates, which is what happened this week.
The drop in rates may only be temporary in light of recent reports that show a tightening job market, although moderate wage growth could help keep inflation low and benefit mortgage rates. Although the real estate market is facing challenges due to a lack of affordable inventory and other factors, the overall strength of the economy is offering little reason for the Fed to change course which could lead to higher mortgage rates in the future despite the decline we saw this week.
The mortgage rate for a 30 year fixed rate loan slid 0.125% to 4.250% while the rate for a 15 year fixed rate mortgage dropped to 3.625%. The interest rate on a 5/1 adjustable rate mortgage (ARM) also declined 0.125% to 3.750%. FHA mortgage rates and VA mortgage rates both held steady at 3.875%, with both programs appealing to borrowers focused on low or no down payment programs, especially first-time home buyers. Jumbo mortgage rates dropped to 4.375% while non-owner occupied mortgage rates remained at 4.625%.
Although the Fed's decision to keep rates unchanged was anticipated, the mortgage market's reaction to the news was pleasantly surprising. After rising moderately over June and July, the drop in mortgage rates is welcome news for borrowers. While interest rates are impossible to predict, prospective borrowers looking to buy a home or refinance may be able to lock in a lower rate by acting sooner rather than later. As lenders react differently to dynamic market conditions, we have also seen greater fluctuations in mortgage rate pricing, which means borrowers benefit more by comparing several lenders.
Because rates change constantly, we continue to actively monitor the mortgage market for new developments. Borrowers should check the FREEandCLEAR rate tables regularly to review personalized, updated mortgage rates for lenders in their area. Our rate tables are free to use and require no personal information.
What You Should Know About Jumbo Mortgages
The Interest Rate May Be Higher.
Although not always the case, jumbo mortgage rates can be .125% to .500% higher than the interest rate for a conforming loan. This is because in the past lenders have assigned a higher risk to jumbo loans. Currently, jumbo mortgage rates tend to be the same as conforming loan rates but market fluctuations may cause differences. Interest rates for jumbo mortgages vary based on loan amount, loan-to-value (LTV) ratio, credit score and other factors.
Lenders have more discretion in determining jumbo mortgage rates and closing costs so borrowers see more variation in pricing for jumbo loans. Because interest rates and fees for jumbo mortgages can vary significantly, borrowers should shop lenders to find the mortgage with the most attractive terms. Additionally, because jumbo mortgages have larger loan amounts, even a small difference in interest rate can save you thousands of dollars in interest expense. FREEandCLEAR recommends that you always compare four-to-five mortgage quotes before selecting a lender, regardless of loan size, but shopping your mortgage business is especially important for jumbo mortgages.
Borrower Qualification Guidelines Can Vary.
Lenders also have more flexibility in setting borrower qualification guidelines for jumbo mortgages. For example, different lenders may have different credit score, debt-to-income ratio and down payment requirements. In addition to shopping for the jumbo mortgage with the lowest rates and fees be sure to understand the lender’s borrower qualification guidelines and underwriting policies.
There are Different Types of Jumbo Loans.
Technically, any mortgage amount above the conforming loan limit set by the government ($453,100 for a single unit residence in the contiguous U.S. or $679,650 for a single unit residence in Alaska or Hawaii) is considered a jumbo mortgage but the government sets higher loan limits in higher cost areas. For example, the loan limit for a single unit residence in a high cost area in the contiguous U.S. can be up to $679,650 and up to $1,019,475 in Alaska or Hawaii. Loan amounts that fall in between $453,100 (or $679,650 in Alaska or Hawaii) and the conforming loan limits for higher cost areas are called conforming jumbo, super conforming or agency jumbo mortgages and may have slightly higher interest rates than conforming loans. Loan amounts above the conforming loan limit for a county are called non-conforming jumbo mortgages or jumbo mortgages for short. The important point to note is the the interest rate and borrower qualification guidelines are typically different for jumbo mortgages.
Why Borrowers Compare Jumbo Mortgage Rates on FREEandCLEAR
Comparing jumbo mortgage rates can save you thousands. Use our rate tables to find the lender offering the lowest rates and fees
Our rate tables put you in control. You can compare lenders anonymously plus you never need to provide your social security number
Review jumbo mortgage rates from leading lenders. Our lenders offer highly competitive terms to win your mortgage business
More FREEandCLEAR Mortgage Resources
We provide a comprehensive overview of jumbo mortgages including borrower eligibility and loan-to-value (LTV) ratio requirement
Use our Conforming Mortgage Limit Calculator to determine the jumbo loan limit for your county. Mortgage amounts above the conforming loan limit are non-conforming jumbo loans
Jumbo mortgages can be more complicated than other mortgages so the FREEandCLEAR Mortgage Expert is standing by to answer your questions. So fire away and receive a helpful response within 24 hours
Use our Mortgage Selector to determine the type of mortgage that is right for you as well as how much mortgage and home you can afford