dcsimg
We research, you save.
Got Questions On Rates? (855) 610-2972

Does the Federal Funds Rate Affect Mortgage Rates?

HSH.com

Does the Federal Funds Rate Affect Mortgage Rates?

The short answer? No.

This graph contrasts the movements of the weekly average Federal Funds rate against the movements of the weekly 10-year Treasury Constant Maturity and those of the average 30-year fixed rate mortgage and 5/1 Hybrid ARM. It covers a time period of the last three years.

For more about Fed Funds, mortgage and other loan rates, click here.

Federal Funds and Mortgage Rates

The ultra-short-term Federal Funds rate -- an overnight lending rate between banks -- has little direct influence on longer-term rates, such as those found on mortgage loans. These are more likely to be influenced by moves in longer-term Treasuries, such as the 10-year seen above.

For more on why mortgage rates move, read What Moves Mortgage Rates? (The Basics)

HSH grants permission to utilize this graph providing that the graph and its contents are not altered in any way.

Click here for a list of indexes for Adjustable Rate Mortgages.

More help from HSH.com

  • Metropolitan area definitions

    Metro area definitions for the 50 metropolitan areas in "The salary you must earn to buy a home in 50 metros"
  • The salary you must earn to buy a home in the 50 largest metros

    Here’s how much salary you would need to earn in order to afford the median-priced home in your metro area.
  • Will the debt forgiven from my loan modification be treated as income and taxed?

    Mortgage debt forgiven via due to principal reductions in HAMP and other mortgage modifications aren't subject to tax, but there are conditions you should know.
  • HSH.com on the latest move by the Federal Reserve

    The Federal Reserve concluded a meeting today with no change to the federal funds rate; the target range for the key policy tool remains 1.25 to 1.5 percent.
  • How to refinance when you are self-employed

    Refinancing rules aren't the same when you are self-employed. This article explains how self-employed borrowers can successfully refinance.