No one can really tell you with absolute certainty what mortgage rates are going to be, but everyone’s going to try.  Instead of listening to the media and every different news article try to make their predictions, how about I show you a simple way to determine where *SHORT* term rates are likely going?

You see, the 30 year and 15 year fixed mortgage follows a trend line.  And that trend line they follow is called a 10 year Treasury Note.  The treasure Note is basically a bond in the United States government.  The way a Treasury Note works is you give the government your money — just like a bank account –and they will pay you a set percentage every 6 months throughout the 10 year period.  At the end of the 10 years, you get your full investment back.  These notes are usually considered very desirable around the world, mainly because the United States is considered the safest place to park your money.  And if there’s little risk, you aren’t going to make a large return.

As I mentioned, the 10 year Treasury Note is the trend line mortgages follow.  If 10 year treasuries go up, rates will almost always head up afterward.  If the treasuries go down, mortgage rates go down.  To simplify it, mortgages are related to this 10 year Treasury Note.  Here’s a graph showing the correlation between the 10 year Note, the 30 year and 15 year mortgage rates.  As you can see they both very closely follow the red Treasury Note rate.

As of the time of this video, the 10 year Treasury had just plummeted from about 3% to below 2%.  When the Treasury Note was 3%, the 30 year mortgage rates were right at about 4.5% – or 1.5% above the Treasury Note.  Now that treasury rates have dropped to below 2%, the 30 year mortgage is coming down with it.  In fact, this morning 30 year mortgage rates averaged 3.98%, and I personally feel they’ll go down to the mid or upper 3’s.  After all, if the Treasury Note is under 2%, if we just add the additional 1 and a half percent, that makes just under 3.5%!  NEVER before have rates been this low.

Now that you know what to look for, how can you find the information?  The easiest way is to go to  If you scroll down the page you’ll find the rate for the 10 year Treasury Note.  The website even lets you customize the chart and look at historical information.  Keep in mind that these rates don’t jump dramatically.  Usually they only jump in small percentages unless something drastic happens with the global economy.  So if you’re thinking about refinancing and not sure if you should do it now or wait a little while, check the Treasury Note online.  If it’s recently dropped, it might not be too bad of an idea to wait a few weeks.  If it’s recently spiked up, lock it in while you can.  …now that’s good to know. 🙂

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