By financen | December 26, 2007 - 6:50 am - Posted in Mortgage

Interest rates on mortgages fluctuate on daily basis. The difference in the today mortgage interest rate and the mortgage interest rate tomorrow may be of only a few points, but these few points too make a big difference in the amount to be paid as interest depending how big your principle loan amount is. Thus if there is a gap of many days between the time you have taken a mortgage rate quote from the lender and the day you close the mortgage deal, check the rate applicable on the mortgage. You can even lock the mortgage rate depending upon the policy of the lender.

In order to get an accurate today mortgage interest rate you need to take a good look at the trends in the factors that determine the mortgage interest rate. There are various macro level and micro level factors that determine whether the today mortgage interest rate will rise up or see a downfall. Let us see what these factors are.

  • Macro level factors affecting today mortgage interest rate:

Macro level factors are those that are related to the economy as whole. They would include:

1) Inflation Rate: A rise in inflation rate in the economy leads to rise in mortgage interest rates too. As higher inflation indicates growth in the country’s economy inflation rate depends on various indicators like Consumer Price Index (CPI), Producer Price Index (PPI), rise in Dollar rates, etc.

2) Inter Bank lending rates: Mortgage rates widely depend on the movement in the credit market, which includes many financial intuitions like banks. Thus the fluctuation in rates at which inter bank lending takes place results in fluctuation in mortgage interest rates too. Thus change in Federal Fund Rate, LIBOR (London Interbank Offered Rates), 12-month Treasury average (12 MAT or 12 MTA), Cost of Funds Index (COFI), and Constant Maturity Treasury Index (CMT) indicates change in today mortgage interest rate.

3) Stock Market: The stock market and mortgage market have a great effect on each other. That’s because mortgage rates basically depend on the fundamentals of demand and supply and ups and downs in the stock market have a major impact on the credit supply in the financial markets.

Though most of the mortgage loan rates are based on bank interest rates, sometimes the supply and demand forces have a larger role to play. Thus it is quite possible that today mortgage interest rate may move in a different direction than bank interest rates.

  • Micro level factors affecting today mortgage interest rate:

Micro level factors are those that are related to an individual, i.e. the prospective borrower. This means that mortgage interest rate also depends upon your requirements as the borrower. Thus if the amount of loan is going to be high as against your income level then the rate of interest will also go up as the risk factor to the lender increases. Similarly interest rate for shorter-term loans would be lower than the long-term ones.

Also if you make higher down payment or discount points, lower will be the interest rate quoted to you. Your credit history and your current credit rating have a key role in reckoning the today mortgage interest rate.

This entry was posted on Wednesday, December 26th, 2007 at 6:50 am and is filed under Mortgage. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

2 Comments

  1. January 28, 2008 @ 11:18 pm


    “The difference in the today mortgage interest rate and the mortgage interest rate tomorrow may be of only a few points, but these few points too make a big difference in the amount to be paid as interest depending how big your principle loan amount is.”

    Fortunately, the interest rate is becoming less important. What is gaining in importance is the ability to obtain a Home Equity Line of Credit (HELOC) as part of the package. Folks are learning how to use a HELOC as an “interest cancellation” account to accelerate their mortgage equity and save huge amounts of amortized interest.

    Equity acceleration is been problematic.

    Today’s Real Estate market means that folks can no longer count on appreciation to build home equity. Those who realize that they need to pay down their current mortgage debt are looking for alternate ways to aggressively (yet safely) build equity.

    And they’ve discovered a perfect online system to do that; they can focus on their wealth accumulation goals while accelerating their equity simply by using a Home Equity Line of Credit to ‘power’ the Money Merge Account™ financial solutions program.

    A typical 30 year loan (of whatever type) can be paid down in 1/3 to 1/2 the time — it’s a great way to save *huge* amounts of income by eliminating a mortgage amortization front-end interest load. (On a million-plus dollar home, I’ve personally seen where the Money Merge Account™ program will save the homeowner $750,000 in interest charges!)

    And the best thing – homeowners don’t have to refinance their existing mortgage or, in most cases, make any adjustments to their lifestyle.

    It is unfortunate that most of us were never taught to follow three essential principles: (1) Avoid paying interest, whenever possible, (2) Use other people’s money, whenever possible and (3) Find and use a financial system that will guide you, especially if you have the tendency to go off-track. The Money Merge Account™ software and the program’s counselors use these principles to keep each homeowner focused on their wealth accumulation goals.

    I’d be happy to provide further details…

  2. March 11, 2008 @ 3:47 pm


    Great article, thank you very much!

    Posted by Easy-Refinancing