Mortgage Interest Rates

Mortgage Interest Rates

Mortgage Interest Rates

As we all know, mortgage interest rates can vary quite significantly at different points in time and from one lender to the next. One year, you may be able to secure a loan for a new home for as low as 5.75%, while the lowest mortgage interest rate may be 6.5% the next year.

What makes mortgage interest rates change and why?

There are a number of sophisticated factors that cause mortgage interest rates to rise and fall. Among these factors are supply and demand, the monetary policy of the Federal Reserve Board (often referred to as "the FED"), legislative fiscal policies, and a number of other factors.

In most cases, rates will be low when the economy is "sluggish" and there is a relatively low demand for loans and credit. Conversely, mortgage interest rates will tend to be higher when economic conditions are good and there is a larger demand for credit.

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