Mortgage rates today, December 28, plus lock recommendations

Gina Pogol
The Mortgage Reports editor

What’s driving current mortgage rates?

Mortgage rates today mostly fell. Today’s Weekly Jobless Claims came in higher than expected at 245,000 instead of the anticipated 240,000.

This is only considered important if it varies significantly from expectations, and it did not — but it is good for rates, because it lessens upward pressure on wages.

So what happened?

Today’s economic data largely points to the end (at least for now) of the rising rate trend. Most numbers here are neutral-to-good for rates. Might be a good time to lock if closing soon.

Rates and prices can become very volatile during the last days of the year — profit-taking, tax planning, and fewer participants in the market all cause illogical and unpredictable events. If you have your heart set on a certain rate, and it’s available, consider nailing it down.

Verify your new rate (Jan 18th, 2019)

Mortgage rates today

Program Rate APR* Change
Conventional 30 yr Fixed 4.038 4.049 -0.08%
Conventional 15 yr Fixed 3.58 3.599 -0.04%
Conventional 5 yr ARM 3.688 3.941 Unchanged
30 year fixed FHA 3.833 4.834 -0.04%
15 year fixed FHA 3.25 4.198 Unchanged
5 year ARM FHA 3.563 4.468 Unchanged
30 year fixed VA 3.875 4.061 -0.04%
15 year fixed VA 3.375 3.685 -0.06%
5 year ARM VA 3.625 3.671 Unchanged

Your rate might be different. Click here for a personalized rate quote. See our rate assumptions here.

(Note that FHA APRs include required mortgage insurance.)

Financial data that affect today’s mortgage rates

Most indicators are mixed, likely to offset each other unless we get some Washington, DC weirdness later. Then all bets are off.

  • Major stock indexes opened slightly higher (slightly bad for mortgage rates)
  • Gold prices continue their upward trajectory, rising another $7 an ounce to $1,297. (Trend is very good for mortgage rates. In general, it’s better for rates when gold rises, and worse when gold falls. Gold tends to rise when investors worry about the economy. And worried investors tend to push rates lower).
  • Oil remained at $60 a barrel (that’s neutral for today, but still not-good for mortgage interest rates. Higher energy prices play a large role in creating inflation.)
  • The yield on ten-year Treasuries dropped another basis point (1/100th of 1 percent) to 2.43 percent (good, because mortgage rates tend to follow Treasuries and hey have been dropping for several days in a row).
  • CNNMoney’s Fear & Greed Index fell five points, to a neutral 60.That’s a good trend for rates, because in this case, greed is NOT good. “Fearful” investors push rates down as they leave the stock market and move into bonds, while “greedy” investors do the opposite. That causes rates to rise.

Mortgage rates today remain very favorable for anyone considering homeownership. Residential financing is still affordable.


This is a holiday-shortened week. Friday brings no pertinent economic reports. However, it’ also the last trading day of the year, and things can get volatile as investors try to capture tax losses and balance their portfolios.

We’re also looking at a long weekend, which tends to cause lenders to price conservatively. That’s in case something occurs over the weekend (while they are closed for business) that could cause a big rate jump.

Industry pros call these events “tape bombs,” named after the old fashioned ticker tapes that used to convey movements in stock markets.

Rate lock recommendation

In general, 30-day is the standard price most lenders will (should) quote you. The 15-day option should get you a discount, and locks over 30 days usually cost more.

The Ten-Year Treasury Index backing away from 2.50 percent is encouraging — a psychological wall that, if broken, could send rates shooting up. I’d lock if I had anything fixed closing soon, and am comfortable with waiting if my closing is further out.

  • LOCK if closing in 7 days
  • LOCK if closing in 15 days
  • FLOAT if closing in 30 days
  • FLOAT if closing in 45 days
  • FLOAT if closing in 60 days

Video: More about mortgage rates

What causes rates to rise and fall?

Mortgage interest rates depend on a great deal on the expectations of investors. Good economic news tends to be bad for interest rates, because an active economy raises concerns about inflation. Inflation causes fixed-income investments like bonds to lose value, and that causes their yields (another way of saying interest rates) to increase.

For example, suppose that two years ago, you bought a $1,000 bond paying five percent interest ($50) each year. (This is called its “coupon rate.”) That’s a pretty good rate today, so lots of investors want to buy it from you. You sell your $1,000 bond for $1,200.

When rates fall

The buyer gets the same $50 a year in interest that you were getting. However, because he paid more for the bond, his interest rate is not five percent.

  • Your interest rate: $50 annual interest / $1,000 = 5.0%
  • Your buyer’s interest rate: $50 annual interest / $1,200 = 4.2%

The buyer gets an interest rate, or yield, of only 4.2 percent. And that’s why, when demand for bonds increases and bond prices go up, interest rates go down.

When rates rise

However, when the economy heats up, the potential for inflation makes bonds less appealing. With fewer people wanting to buy bonds, their prices decrease, and then interest rates go up.

Imagine that you have your $1,000 bond, but you can’t sell it for $1,000, because unemployment has dropped and stock prices are soaring. You end up getting $700. The buyer gets the same $50 a year in interest, but the yield looks like this:

  • $50 annual interest / $700 = 7.1%

The buyer’s interest rate is now slightly more than seven percent. Interest rates and yields are not mysterious. You calculate them with simple math.

Verify your new rate (Jan 18th, 2019)