Mortgage Fixed Rates Lower?

Right now we are seeing the fixed rates being artificially higher for consumers. Fixed mortgage rates are determined by the bond market. Today, the 5 year bond rate is 3.89% and the best discounted mortgage rate is 5.89%. This means there is a 2.00% override for the banks. Normally the spread is about 1.40% above the lowest bond rate. So in theory the 5 year fixed rate should be 5.29%. Watch for lower fixed rates in the future or higher bank profits.