Mortgage rates for Feb. 10, 2022: Rates holding relatively firm
Rising inflation continues to raise concerns that mortgage rates will quickly follow suit. While we could see rate hikes in the near future, Rate interest rates* are holding pretty steady today, Feb. 10, 2022. Only 15-year fixed rate loans have seen any uptick; other fixed rate loans haven’t budged at all.
This lack of movement is a somewhat positive sign in the current lending environment. As markets respond to the Fed’s ongoing efforts to battle inflation, rate positions could be worse in the coming weeks and months. With that in mind, today could be as good a day as any to lock in your rate on a new purchase loan or cash-out refi.
Market update
Interest rates are on the rise this morning after a report showed U.S. inflation accelerated to a 7.5% annual rate — a 40-year high. The report certainly keeps the Fed on its path to begin hiking rates next month, with many speculating the Fed will hike rates by 50 basis points (bps) instead of the customary 25bps. Forward money markets are pricing in at least one 50bps increase at some point this year. Treasuries and mortgages are both under pressure post-CPI, with 10-years yields poised to reach 2.0% and prices on mortgage-backed securities down about 62bps.
With rates across the entire yield curve and product universe on the rise, equity markets are also declining as investors contemplate decreased lending, more expensive financing, slower economic growth and lower corporate earnings. We also saw our first signs of an inverted yield curve, with the rates on 7-year and 10-year treasuries going negative by 16bps. A yield curve inversion happens when shorter-term rates are higher than longer-term ones and is usually a sign of an economy in decline. This has a large effect on ARM rates, so if you see high ARM rates relative to 30-year ones, this is why.
— Jeremy Collett, Rate Executive Director of Capital Markets**
30-year fixed rate
Starting with the most popular loan type, 30-year fixed rate loans haven’t experienced any day-over-day (DOD) rate movement this morning. Even so, 30-year rates are up week over week (WOW) and month over month (MOM). Using the borrower profile listed below, your monthly mortgage payment would be $1,410.71.*
- Today’s rate: 3.875%
- DOD change: 0
- WOW change: up 27.5 bps***
- MOM change: up 37.5 bps
- Today’s APR: 3.976%
- DOD change: 0
- WOW change: up 27.8 bps
- MOM change: up 37.9 bps
15-year fixed rate
Interest rates on 15-year fixed rate loans are higher than they were yesterday, making this loan type the lone exception to today’s relatively inert rate activity. It’s probably no surprise that 15-year mortgage rates have also gone up with last week and last month’s positions. If you locked in your rate now, you could expect to pay $2,089.83* on your home loan each month.
- Today’s rate: 3.125%
- DOD change: up 13.5 bps
- WOW change: up 13.5 bps
- MOM change: up 50 bps
- Today’s APR: 3.297%
- DOD change: up 13.6 bps
- WOW change: up 13.6 bps
- MOM change: up 50.5 bps
FHA 30-year fixed rate
Rate activity on FHA 30-year fixed rate loans have somewhat mirrored their conventional counterpart: no day-over-day movement, but rates have increased week over week and month over month. As of today, your mortgage payment on a FHA 30-year loan would be $1,385.09.*
- Today’s rate: 3.725%
- DOD change: 0
- WOW change: up 22.5 bps
- MOM change: up 22.5 bps
- Today’s APR: 4.527%
- DOD change: 0
- WOW change: up 23.3 bps
- MOM change: up 23.3 bps
Today’s takeaway
Despite the many warning signs pointing toward a potential rate hike, Rate mortgage rates haven’t moved too much today. Only 15-year fixed rate loans have seen any increase at all, while both 30-year options are holding steady.
Will these conditions hold up? There’s no way to say for sure, but the economic winds certainly seem to be blowing in a particular direction. If you want to avoid paying more interest on a traditional or cash-out refi, locking in your rate now could be the best option available for the foreseeable future. Talk to a mortgage specialist today to learn more about your financing options and see what your next steps should be.
Disclaimer
*Above scenarios assume a first lien position, 40 day rate lock on a primary residence and are subject to change without notice. Subject to underwriting guidelines and applicant’s credit profile. The actual interest rate, APR and payment may vary based on the specific terms of the loan selected, verification of information, your credit history, the location and type of property, and other factors as determined by Lender. Contact Rate for more information and up to date rates.
**Jeremy Collett is Rate’s Executive Director of Capital Markets. Market Updates are designed to provide readers with a high-level yet insightful view of how economic news, events and trends affect mortgage rates and the homebuying process.
***Basis points (bps) measure the percentage change on interest rates. One basis point represents a 0.01% shift.
Interest rates are based on a borrower profile fitting the following criteria:
- Zip code: 60031
- Home type: Single-family house
- Purchase price: $375,000
- Down payment: 20% ($75,000)
- Mortgage balance: $300,000
- FICO score: 740+
- Military member: No
Powered by Froala Editor