Compare Jumbo Mortgage Rates and Lenders

Mortgage rates increased across the board this week following the Federal Reserve's widely anticipated decision to raise interest rates at its June meeting.  In its statement, the Fed pointed to a robust labor market, improving household spending, sustained business investment and accelerating inflation to support a 0.250% increase in the target Fed Funds rate to 1.750% to 2.000%.  The Fed's removal of more moderate language from its statement as well as bullish comments on the state of the economy by Fed Chairman Jerome Powell also increased the likelihood of two additional interest rate hikes this year and rate increases in 2018.

Although June's quarter point rate increase was all but guaranteed, there was some debate prior to the meeting over the number of rate hikes to expect for the remainder of the year, with relatively flat wage growth, moderate inflation and international trade concerns providing reasons for the Fed to pause or slow its activity.  Coming out of the meeting, however, there is much more clarity regarding the Fed's plan for the second half of 2018.

While the increase in the Federal Funds rate and the Fed's more aggressive tone pushed mortgage rates higher this week, there was some positive news for borrowers.  First, the Fed clearly telegraphing its intentions should provide more stability to mortgage rates in the near term.  Additionally, because the market had expected the Fed's actions, the upward move in mortgage rates was relatively moderate, with most programs only increasing 0.125%, less than the quarter point increase in the Fed Funds rate.     

The mortgage rate for a 30 year fixed rate loan moved 0.125% higher to 4.500% while the rate for a 15 year fixed rate mortgage increased to 3.875%.  Despite inching higher, the interest rate on a 5/1 adjustable rate mortgage (ARM) remained attractive at 3.875%.  FHA mortgage rates inched up 0.125% to 3.875% while VA mortgage rates bucked the overall trend and 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 matched conforming loans at 4.500% and non-owner occupied mortgage rates increased 0.125% to 4.750%.

Although the Fed's move to raise rates surprised few, the mortgage market reaction to the news was better than expected, at lease in the near term.  We have seen rates gradually move higher this year in response to the Fed's forecast and market predictions for future rate hikes were reinforced this week.  While interest rates are impossible to predict, prospective borrowers looking to buy a home or refinance their mortgage may be able to lock in a lower rate by acting sooner rather than later.  As lenders react differently to shifting market conditions, we have also seen greater variation in mortgage rates over the last month, which means borrowers benefit more by shopping multiple lenders.

Because rates fluctuate constantly, we continue to actively monitor the market for new developments.  Borrowers should check the FREEandCLEAR mortgage 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.