Knowing When To Lock Or Float Is Easy When Mortgage Rates Are Range-Bound

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I recently described mortgage rates as being "range-bound", repeatedly returning to the same 5.250 percent, 0 points marker since last December.

Rather than take my word for it, though, check this chart. It plots the Freddie Mac 30-year fixed mortgage rate from December 2008 to July 2009.

Over the past 8 months, Freddie Mac's reported mortgage rates have carved out a wide range -- from 4.750 to 5.750 percent.

These aren't "true" mortgage rates, per se, because Freddie Mac reports its rates weekly and mortgage rates change multiple times daily. There have been days, for example, when rates moved higher or lower than what's plotted above.  Additionally, Freddie Mac reports rates as if of points were being paid.

To undo the "points", we'd have to increase the charted rates by about 0.2%.

And that brings us back to the initial point: No matter how many times rates go higher or go lower, they keep retracing back toward 5-and-a-quarter.

Also worth noting?  Mortgage rates have yet to come close to the fabled "4 percent" number that's people hang their hats on.  The lowest 0-point rates have we've seen since December is 4.500% and that lasted for less than an hour.

So, to sum up, if you still haven't refinanced your home to a lower rate, or moved from your adjustable-rate mortgage to a fixed rate one, use the chart as your guide.  Consider anything less than 5.250 percent is "good" because, if history is an indicator, rates are likely to pop right back.