August 1, 2013
5 Year Fixed Rate Has Gone Down With Some Lenders After 3 Hikes
A few weeks ago there was a lot of talk about rates rising and they did. Three times within a one month period. This was due to several reasons including the Fed Bank in the U.S. stating that they, at some point, will start scaling back on the amount of quantitative easing they have been doing. This is where they have been buying up thousands of US bonds in order to keep rates low which has also spurred the stock markets, well until this announcement.
They made another announcement a week ago. That one was to assure people around the world that the scaling back of this won't happen for a while and will be very gradual when that happens as the world economy is still fairly fragile. This made bonds yields fall which in turn will make it cheaper for lenders to raise money to lend out to us borrowers and hence rates will sometimes fall.
A few lenders that I works with have dropped their 5 year fixed rate by 5 and 10 basis points or .05 to .1% Lowest rate on the market currently for this term is 3.34% Still very low. But how long can these historically low rates last for. Who knows…but I can hold one for 120 days while one looks for a home to buy.