Mortgages Blog

Finance Blogs » Mortgages Blog » Flat-footed over a big jump in rate

Flat-footed over a big jump in rate

By Holden Lewis ·
Monday, November 15, 2010
Posted: 9 am ET

Mortgage rates woke up on the wrong side of the bed this morning. Fixed mortgage rates are up about one-eighth of a percentage point compared to the end of the day Friday.

What bad news for people who decided during the weekend to refinance this week.

You're asking whether this is a temporary blip or the beginning of a trend. In other words, will rates soon drop back, or will they continue to rise? Or, to put it more bluntly: Should you float (hoping that rates will drop), lock (in case rates continue to rise) or just give up and not refi?

The trend is upward. Rates are rising. If rates fall back the eighth of a point that they rose this morning, they won't stay there for long. On the question of whether you should float, and hope rates fall back, or lock: If you can lock at today's rate and save lots of money, I think you should take your winnings off the table by locking the current rate. On the other hand, if you don't mind living with your current payment -- if refinancing isn't worth the hassle unless rates fall back -- then go ahead and float.

Here's a link to our mortgage calculator.

By the way, if you want to keep tabs on what's happening to mortgage bond yields and mortgage rates, follow me @HoldenL on Twitter.

Bankrate wants to hear from you and encourages comments. We ask that you stay on topic, respect other people's opinions, and avoid profanity, offensive statements, and illegal content. Please keep in mind that we reserve the right to (but are not obligated to) edit or delete your comments. Please avoid posting private or confidential information, and also keep in mind that anything you post may be disclosed, published, transmitted or reused.

By submitting a post, you agree to be bound by Bankrate's terms of use. Please refer to Bankrate's privacy policy for more information regarding Bankrate's privacy practices.