Jumbo rates fall as mortgage market sends mixed signals

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The average rate on a 30-year jumbo mortgage fell to 3.35 percent this week, even as interest rates for other loans stayed put or rose. The jumbo’s fall means high-dollar loan holders are at an advantage when it comes to refinancing or getting a new mortgage these days, though rates remain fairly favorable across the board.

jumbo mortgage, also known as a non-conforming loan, is one that exceeds the maximum value of what that can be sold to Fannie Mae or Freddie Mac. In most areas of the country, that limit is $548,250 this year, but the threshold jumps to $822,375 in more expensive areas.

The need for a jumbo mortgage is determined by the amount of financing required for your transaction, not the sale price or total worth of a home. You could get a conforming loan on a multimillion dollar property if your down payment or equity make up the difference between the price and the jumbo mortgage threshold.

Mortgage rates have fluctuated in the last few weeks, and most experts expect them to trend higher as the coronavirus recovery continues and life slowly gets back to normal. Most industry watchers expect mortgage rates to end the year higher, though still low by historical standards.

Near term, experts in Bankrate’s weekly poll are divided over where rates are headed in the week ahead, though the largest share expect them to fall.

“Despite underlying concern about inflation the fact is that the Fed is flooding markets with liquidity,” said Dick Lepre, senior loan officer at RPM Mortgage, Inc. in Alamo, California. “In effect the Fed is buying any Treasury debt that is for sale. This drives yields lower.”

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Written by
Zach Wichter
Mortgage reporter
Zach Wichter is a mortgage reporter at Bankrate. He previously worked on the Business desk at The New York Times where he won a Loeb Award for breaking news, and covered aviation for The Points Guy.