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Home Loan Rates Lowest in Two Years Today

As we all know, mortgage interest rates change on a daily and intra-day basis.  With so much volatility, it is often difficult to make the right decision regarding floating or locking.  What is important to remember is the fact that there is a difference between gambling and taking a calculated risk when making mortgage interest rate decisions.  Floating into an economic release such as the employment report (Friday, Dec 7 very important release) is usually a gamble.  In addition, floating over a span of more than a few days is also a gamble.  Unforeseen events can cause instability in the financial markets that results in mortgage interest rate gyrations. On the contrary, floating on a day of positive market movement with no economic data the following day, while such actions is still vulnerable to market movements, can be considered a calculated risk.

The potential for mortgage interest rates to push lower is real considering the tremendous uncertainty of the US economy.  However, interest rates could also rise.  Energy prices remain high and inflationary fears are abundant.  Inflation, real or perceived, can erode the value of bonds causing prices to fall and rates to rise.

It is important to remember that interest rates tend to improve slowly while negative movements tend to happen fast and furiously.  Capitalizing on interest rates at the current levels protects against uncertainty surrounding future interest rate developments.  The important thing to remember is that mortgage interest rates remain historically favorable.