Want to Know "How" and "Why" Mortgage Rates are Determined?

Mortgage and Lending with Movement Mortgage NMLS # 574681

Hello...hope the day is going well...

When it comes to obtaining financing, everyone is concerned with what rate they're getting. In some cases, the rate has more significance than in others (ie. rate/term refinance vs. debt consolidation). Everyone knows where to look for current rates, but many don't know how they're calculated or what makes them move. 

I tell all my clients that rates don't move; it's their price that fluctuates. In a nutshell, mortgage rates are tied heavily to the 10-year Treasury bond yield. Typically, when the yield goes up, rates go up and so do their cost. If the yields go down, rates go down. Bond prices have are inversely proportionate so make sure you make note of the difference. Other factors, especially economic matters, are always causing bond yields to move one way or the other. Usually, if it's bad news for the economy, it's good news for mortgage rates. The opposite is also true.  

Here's a great article to learn more about the topic:


And by the way, be cautious of online rate quotes or advertisements. They usually assume the most ideal loan scenario possible, and many include hidden points. Did you know that bankrate.com was involved in a class action lawsuit for allowing false and misleading interest rate quotes? It's best to talk directly with a mortgage professional who will quote you rate options based upon your loan scenario - every one is different and there are many variables to account for.

If you have any questions, please let me know.

Thanks again...

Posted by

JP Marzano

NMLS ID# 574681

O: 312-654-7216

M: 312-608-1555





Comments (2)

Bill Reddington
Re/max By The Sea - Destin, FL
Destin Florida Real Estate

Try to deal with local lenders. Agree the internet is not a great place to obtain a mortgage. Have had a number of deals kick out because of out of the area lenders.

Oct 14, 2013 06:55 AM
JP Marzano
Movement Mortgage - Chicago, IL
312-608-1555-Specializing in VA, Condos, and more!


Thanks for the comment. I do loans in IL, CA, and FL, but only because I've lived in those states. When I first started in the business 11 years ago, I worked internet leads, and I felt like I was doing things blind. My referral partners appreciate the fact that I know the areas I lend in, and am not sitting in some random call center, treating mortgages like commodities. 


Again, thanks for the feedback...have a great day.


Oct 16, 2013 03:00 AM