Mortgage rates moved very slightly higher today and in some cases, were unchanged.  This keeps average rates in the same territory as last Friday and in a sort of sideways holding pattern ahead of some hotly anticipated market events.  Being sideways here isn't a bad thing though, considering rates are about as low as they've been in a month.  In terms of Conventional 30yr Fixed Best-Execution, we remain at 3.5%, though that rate was slightly more expensive at most lenders today vs yesterday.

(Read More:What is A Best-Execution Mortgage Rate?)

In addition to the Guarantee Fee considerations discussed yesterday (read more...), the fact that we've held onto recently low rates and that the week's most anticipated events begin tomorrow morning, mean that it continues to be a good strategic opportunity to lock.  This says nothing about which direction markets could move.  Indeed, things could go either way, but from a risk/reward standpoint, locking looks better than floating, especially if you missed out on late July/early August rates.

The counterpoint to this is that tomorrow's big-ticket event--the ECB policy announcement--became a little bit of a "smaller ticket event" after details of the ECB's plan were leaked (likely intentionally) early this morning.  If the actual announcement matches the details, it greatly lessens the prospects for volatility tomorrow.  All this will take place before lenders release their first rate sheets of the day.

Long Term Guidance: We'd continue to advocate against trying to "get ahead" of current market movements due to the high degree of uncertainty.  The long-term direction of rates has been down, down, down, for the past year.  At some point, this will turn, and when it does, we highly recommend that you're prepared by drawing your OWN line in the sand as to how much rates would have to rise before you lock at a lost.  That's assuming you don't simply lock as soon as you're able.  For those with lower levels of risk tolerance who would consider movements in cost (despite unchanged interest rates) to be significant, or for those within 15 days of closing, or who are purchasing, this certainly favors locking.  We'd also consider that rates remain very close to all-time lows and uncertainty to all-time highs.  This also favors locking.

Loan Originator Perspectives

Steve Chizmadia, Mortgage Consultant, American Capital Home Loans

If you are a consumer looking for what decision to make on whether or not to float or lock, there are many things to take into consideration. Is the benefit there for you to refinance? If so, be aware that if you take a chance on it and float, you could lose it as you may have once already in the last 2 weeks, but thankfully, the benefit may be back due to market improvements seen last week. Rates are very close to all time lows. If I were under contract to buy a property, I would not mess around and would lock. If I were personally refinancing, I may take a small chance, but would be in constant contact with the loan officer I were working with and would jump on locking in if the markets took a convincing move for the worse with respect to mortgage pricing.

Victor Burek at Benchmark Mortgage

Floating is dangerous right now with ECB announcement tomorrow and jobs data coming Friday. If buying, i would be locking today. If refinancing, i would lock today if my current rate was over 5%. If your current rate is under 5%, and you can tolerate the risk floating could pay off. This is similar to if you were gambling. If you are up big, you can take bigger if you have a rate already in the 4's, you can take a chance.

Mike Owens, Partner with HorizonFinancial, Inc.

Lock your rate before something out of Europe causes rates to rise. Locking is your insurance against missing the boat.

Julian Hebron, Branch Manager, Loan Agent, RPM Mortgage

Still maintaining lock bias ahead of ECB meeting tomorrow to capture rate lows not seen since last low July 23-24. Not that this will be the last time to lock lows, but the short-term risk outweighs the benefits.


  • 30YR FIXED -  3.5%
  • FHA/VA - 3.5% (varies more between lenders than conventional 30yr Fixed)
  • 15 YEAR FIXED -  2.875-3.00%
  • 5 YEAR ARMS -  2.625-3.25% depending on the lender

Ongoing Lock/Float Considerations 

  • Rates and costs continue to operate near all time best levels
  • Rates could easily move higher or lower, but given the nearness to all time lows, there's generally more risk than reward regarding floating
  • But that will always be the case when rates operate near all-time levels, and as 2011 showed us, it doesn't always mean they're done improving.
  • (As always, please keep in mind that our talk of Best-Execution always pertains to a completely ideal scenario.  There can be all sorts of reasons that your quoted rate would not be the same as our average rates, and in those cases, assuming you're following along on a day to day basis, simply use the Best-Ex levels we quote as a baseline to track potential movement in your quoted rate).