Mortgage Blog

I talked to one of my past clients today about the possibility of 2.875% or lower 15 yr fixed rate for 600k. My answer is that the possibility is low, though this is not impossible.

First, I told him about the last time I refinanced for my clients for the rate of 2.875% was March-April of 2013. And the rate was bottomed then. If we compared the rate between April 2013 and Jan 2016, the big difference is that the Fed increased the rate by 0.25% last December. So if we compare apple to apple, today's 3% rate is equivalent to the 2.875% or lower rates of April 2013. And bond was at a lower level then.

Also, today's Fed fund rate is 0.5%. Any 15 yr fixed HB rate at or below 2.875% will squeeze lender's profits on the origination of those loans. Still there are exceptions, if the stock market crashes, and there are lots of buy orders to purchase bonds, especially the mortgage backed security, then the rate will go lower. But at this moment, there are only limited chances of lower rates for 15 yr fixed high balance loans.