The more relevant mortgage rates

The more relevant benchmark for 30-year mortgage rates is the 10-year Treasury yield, which has jumped above 4.6 percent. (They were below 1 percent during the depths of the pandemic.) If you’re shopping for a mortgage, keep in mind that 7.55 percent is just an average — some lenders advertise below-average rates on Bankrate. Many borrowers have been sidelined by the recent rise in rates. Inflation, the economy and Fed policy will remain the main factors driving mortgage rates in the coming months. Market players will keep an eye on the Oct. 6 jobs report and the Oct. 13 inflation reading. “If the data reveals that inflation remains elevated and employment is still growing, then mortgage rates are likely to move up and we can look for what we hope to be the last rate hike of this cycle,” says Melissa Cohn, regional vice president of William Raveis Mortgage.

Standard or conforming mortgages

Many countries have a notion of standard or conforming mortgages that define a perceived acceptable level of risk, which may be formal or informal, and may be reinforced by laws, government intervention, or market practice. For example, a standard mortgage may be considered to be one with no more than 70–80% LTV and no more than one-third of gross income going to mortgage debt.

A standard or conforming mortgage is a key concept as it often defines whether or not the mortgage can be easily sold or securitized, or, if non-standard, may affect the price at which it may be sold. In the United States, a conforming mortgage is one which meets the established rules and procedures of the two major government-sponsored entities in the housing finance market (including some legal requirements). In contrast, lenders who decide to make nonconforming loans are exercising a higher risk tolerance and do so knowing that they face more challenge in reselling the loan. Many countries have similar concepts or agencies that define what are "standard" mortgages. Regulated lenders (such as banks) may be subject to limits or higher-risk weightings for non-standard mortgages. For example, banks and mortgage brokerages in Canada face restrictions on lending more than 80% of the property value; beyond this level, mortgage insurance is generally required