Mortgage rates have fallen across the board this week as lenders slashed their terms in the wake of the fallout of Britain's vote to leave the European Union last week. Dubbed "Brexit", the decision made by UK voters have shaken global financial markets, causing investors to run to the security of U.S. Treasury Bonds. The vote was closely watcher worldwide and prompted the British Prime Minister to resign.
The 10-year Treasury yield is the greatest factor in the fluctuation of mortgage rates. As investors abandon stocks and choose bonds instead, mortgage rates tend to drop. Today, conforming no-point 30-year fixed mortgage rates average 3.5 percent while the 15-year rate is near 2.75 percent.
These rates are at three year lows and driving demand for refinances as borrowers are rushing to lock in low rates. Brexit is expected to keep rates low for the time being. The international uncertainty may even cause the Fed to further delay plans to raise short-term interest rates.
Do you have a question for Real Estate & Mortgage Analyst Mehran Aram? Submit your queries about a home purchase, refinance, or reverse mortgage via Aramco.Biz, social media (#AramcoReport), or over the phone at (866) 381-8888 and your questions may be featured in an upcoming article.