Interest Rate

[Ike Igiebor]

The current interest rate is 3.5 for a 30 year Loan. I know the interest rate for a mortgage is Pegged to the 10 yr note, but what would the interest rate be if the Feds raise the interest rate up .5 this year September rate hike and maybe December/January (.75 total)

[Russell Brazil]

Mortgage rates are not pegged to the 10 year note. Correlated, but not pegged.

It's hard to say what would happen when the Fed raises rates. Since they've lowered interest rates to zero, rates have fluctuated a full 2% while the Fed fund rate hasn't moved.

I imagine that jumbo rates will be more sensitive. A 50 basis point move in the Fed rate I think will move jumbo rates 100 basis points. Conventional might be less than 50 basis points.