Average US 30-year mortgage rate falls to new 2016 lows

Lower interest rates tend to squeeze bank profits, which is one reason that bank shares have fallen significantly since the referendum result.

As rates fell, Home Equity Conversion Mortgages were affected as well. For example, Bankrate, a consumer financial services company, started the day by saying lenders were offering 30-year fixed-rate mortgages at an average of just 3.4 percent.

Rates for much of 2014 and parts of 2015 were above 4%, meaning many borrowers could refinance to lower their monthly payments or shorten their loan terms.

“Borrowers need to bear in mind that there may well be a hefty redemption penalty”.

‘The deal does come with an incentive of free legal fees for those remortgaging but on a true cost basis borrowers might find a more cost-effective deal elsewhere’. More lenders are likely to follow suit.

Last month HSBC became the first lender to offer a mortgage rate of less than 1pc, on its two-year fixed rate mortgage at 0.99pc. In the week following Brexit, LIBOR HECMs with a margin of 3.51% or less could pay the maximum Principal Limit, according to weekly rate data provided by Ibis Software Corporation.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA remained unchanged at 3.61 percent, with points increasing to 0.37 from 0.24 (including the origination fee) for 80 percent LTV loans. A 15-basis point drop in the 30-year rate offers little help. The average 15-year fixed mortgage rate slid to a fresh 3-year low of 2.85 percent. 10 year refinance fixed rate loans are being offered for 3.125% today yielding an April of 3.369%.

Data from Moneyfacts shows the average two-year fixed rate is now at 2.55 per cent, down from 2.56 per cent last Thursday.

The short term 15 year FRM interest rates at the bank have been listed at 2.625% today and an April of 3.072%.

Following remarks by the governor of the Bank of England, Mark Carney, the City believes there is a 78% chance of a base rate cut next week, and an 86% chance of a cut by August, according to economists at Hargreaves Lansdown.

Retail mortgage lenders that lend directly to borrowers and collect most of the profit stand to benefit the most from the current environment, said Paul Miller, an analyst at FBR Capital Markets. 30 year VA FRM interest rates are available starting at 3.25% yielding an April of 3.422%.