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

  • 10 metros where a home costs about $1,000/month

    HSH.com identifies 10 metro areas where you can afford the principal, interest, taxes and insurance payments on a median-priced home for only around $1,000 per month.
  • Home price recovery index: Which metros have improved the most, least?

    Have home prices in your area fully recovered from the declines suffered during the Great Recession, or are they still struggling to make it back to the peaks they reached before the crisis?
  • How do I know refinancing will be affordable?

    After to determine the goal of your refinance, deciding whether that goal makes sense (or not), given your personal situation, depends on a combination of factors.
  • The salary you must earn to buy a home in 27 metros

    Here’s how much salary you would need to earn in order to afford the median-priced home in your city.
  • VA Funding Fee: 5 facts you need to know

    One slight drawback of securing a VA loan is that borrowers often have to pay a fee, known as the “VA Funding Fee.” Here are five facts you need to know about the VA Funding Fee and how it works.