Mortgage borrowers with the best credit profiles continue to enjoy a wider-than-usual gap between the rates they are offered and those for average borrowers
Mortgage borrowers with the best credit profiles continue to enjoy a wider-than-usual gap between the rates they are offered and those for average borrowers.
Figures from LendingTree show that those with credit scores of 760 and above were offered APRs of 4.41% in January, while those with scores of 680-719 were offered 4.70%.
The gap of 29 basis points was down 1 from December but remains near the widest gap recorded since the data series began in April 2016.
January's best offers for borrowers using lenders on the LendingTree platform with the best profiles had an average APR of 3.93% for conforming 30-year fixed purchase loans, up from 3.80% in December. Refinance loan offers were up 5 bps to 3.75%.
For average borrowers, purchase APRs for conforming 30-yr fixed loans were up 13 bps to 4.55%. The loan note rate hit the highest since March 2016 at 4.45% and was also up 13 bps from December.
"Interest rates have decidedly moved up in a classic supply and demand driven change," said Tendayi Kapfidze, LendingTree's Chief Economist and report author. "On the supply side, the tax plan raised the projected borrowing needs of the US government, so debt issuance is expected to increase materially. On the demand side, the Fed's balance sheet normalization is removing a large buyer from the marketplace."
Kapfidze added that consumers looking for a mortgage should optimize the things they can control, such as their credit score, to offset the impact of those they cannot control such as interest and mortgage rates.
Figures from LendingTree show that those with credit scores of 760 and above were offered APRs of 4.41% in January, while those with scores of 680-719 were offered 4.70%.
The gap of 29 basis points was down 1 from December but remains near the widest gap recorded since the data series began in April 2016.
January's best offers for borrowers using lenders on the LendingTree platform with the best profiles had an average APR of 3.93% for conforming 30-year fixed purchase loans, up from 3.80% in December. Refinance loan offers were up 5 bps to 3.75%.
For average borrowers, purchase APRs for conforming 30-yr fixed loans were up 13 bps to 4.55%. The loan note rate hit the highest since March 2016 at 4.45% and was also up 13 bps from December.
"Interest rates have decidedly moved up in a classic supply and demand driven change," said Tendayi Kapfidze, LendingTree's Chief Economist and report author. "On the supply side, the tax plan raised the projected borrowing needs of the US government, so debt issuance is expected to increase materially. On the demand side, the Fed's balance sheet normalization is removing a large buyer from the marketplace."
Kapfidze added that consumers looking for a mortgage should optimize the things they can control, such as their credit score, to offset the impact of those they cannot control such as interest and mortgage rates.
