How will a 25bp drop in the prime help the rate on a 30 yr mortgage?
Posted by admin | Under Conventional Mortgage Thursday Nov 13, 2008The fed is poised to drop prime today by 25bp and possibly the discount rate as well. I am curious if anyone knows how it will affect the interest rates on conventional 30 mortgages. Thanks,
There is no direct correlation between rates on 30 year mortgages and how the Fed manipulates the prime rate. A better indicator to watch is the 10 year Treasury notes.
It won't. Mortgages are based off of the 10yr bank note. They are creating more liquidity between banks by lowering the rate at which banks borrow from each other.
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There is no direct correlation between rates on 30 year mortgages and how the Fed manipulates the prime rate. A better indicator to watch is the 10 year Treasury notes.
References :