Mortgage rates rise for the week of February 17, 2014

Posted by  on Feb 24, 2014

Weak economic data this winter has kept mortgage rates low, while the Federal Reserve's optimism about the economy has pushed rates in the opposite direction. This week, mortgage rates increased a little but remain extremely low.

Mortgage rates

According to HSH.com, last week the overall average rate for a 30-year fixed-rate home loan rose by just four basis points (0.4 percent) to 4.44 percent. Average rates for 15-year fixed-rate mortgage loans rose by three basis points (0.03 percent) to 3.55 percent. Rates for FHA-insured, 30-year fixed-rate home loans rose by five basis points (0.05 percent) to an average rate of 4.06 percent. The average rate for a 5/1 Hybrid Adjustable Rate Mortgage (ARM), the only mortgage product to drop last week, declined by two basis points (0.02 percent) to an average rate of 3.06 percent, its lowest rate since last November. Compare mortgage rates for your area before refinancing or applying for a purchase loan.

Refinancing into an ARM

Last week's rates show a wider than usual gap between a 5/1 ARM and a 30-year fixed rate loan, which may lead some borrowers to consider refinancing into an ARM. A mortgage calculator can help you estimate your payments, but be sure to consider whether you can pay off your loan before the rate adjusts or easily afford the worst case scenario payments if the loan resets to the maximum rate.

This week mortgage rates are expected to remain nearly unchanged.

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