How often do interest rates change?

Interest rates can change at any time and can change as often as the market reflects any fluctuation. Your interest rate is never safe until it is locked. Depending on the term of your lock, your loan must close and fund before the lock expires. If you do not lock your interest rate, you are subject to actually getting a higher rate than what was originally negotiated. Double check with your mortgage professional to make sure your rate is locked!

Since mortgages are often packaged to together and sold on the secondary market as bonds, or mortgage backed securities, mortgage rates tend to fluctuate with the yields of the 10 year treasury bond. The same factors in the US Economy that cause the yields of bond rates to fluctuate also can dictate what mortgage interest rates will do. This happens on a daily basis and although most rate fluctuations are minimal, they do occur daily.

The great advantage mortgage brokers have over banks is the ability to shop interest rates of national lenders. If rates drop at a different they can re lock your loan with that lender in minutes. Local banks and credit unions cannot offer this advantage.

Interest rates on adjustable rate mortgages can change accordingly to your adjustable rate mortgage loan terms. Many ARM loans have interest rates that adjust every 6 months or every 12 months, as these are the most common adjustment terms. However, some ARM loans may adjust every month as well. Therefore, it is very important to ask questions about how your ARM loan works, how often it adjusts after the initial fixed rate period and what the Caps are for each adjustment period and over the life of the loan.

Interest rates can change hourly, because mortgage backed securities are traded on a daily basis on the Chicago Board of Trade. When mortgage backed securities are traded, the move in accordance with other economic developments that are occurring.

Lenders change the rates they charge on mortgages at least daily and sometimes midday. If you are quoting rates from different mortgage brokers make sure you quote on the same day.

» DISCLAIMER: The information contained in this article on 'How often do interest rates change?' is a collection of contributions by licensed mortgage professionals and is not the opinion of Broker Outpost LLC. Always consult a licensed professional before applying for a mortgage.