Mortgage Rates

Fixed mortgage rates are determined by the bond market. The bond market rates are determined by the demand for bonds from the very large money institutions. The banks and mortgage lenders charge a spread that varies on a daily basis. Normally the spread between the bonds and discounted 5 year fixed rate is around 1.40. Currently the spread is around 1.80, so we could be seeing the 5 year fixed rate coming to a lower level then today.