Mortgage Rates Monday, June 12: A Step Higher for Fed Week

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Mortgage rates for 30-year fixed, 15-year fixed and 5/1 ARMs all inched higher today, according to a NerdWallet survey of mortgage rates published by national lenders Monday morning.

Wednesday, the Federal Reserve will announce whether or not it will raise short-term interest rates. Wall Street is confident the central bank will hike rates by a quarter of a percentage point.

The Fed’s outlook statement regarding future interest rate increases — perhaps more than the hike itself — could provide motivation for lenders to reprice their loans this week.

Meanwhile, Fannie Mae, a government-backed company that helps fund the mortgage industry, will soon make qualifying for a home loan a bit easier. As of July 29, the firm will increase a borrower’s allowable debt-to-income ratio to 50%, up from 45%.

The ratio compares the total amount of debt due each month — including what you will owe on your new mortgage — against your monthly income, before taxes.

While exceptions have been made in the past, Fannie Mae is incorporating the higher debt allowance into its automated loan approval system.

Freddie Mac, another government-sponsored enterprise that along with Fannie Mae underwrites about half of the mortgage market, is so far maintaining a DTI ratio limit of 45%, though allowing some exceptions.

MORTGAGE RATES TODAY, MONDAY, JUNE 12:

(Change from 6/9)
30-year fixed: 4.04% APR (+0.01)
15-year fixed: 3.42% APR (+0.01)
5/1 ARM: 3.85% APR (+0.01)


NerdWallet daily mortgage rates are an average of the published annual percentage rate with the lowest points for each loan term offered by a sampling of major national lenders. APR quotes reflect an interest rate plus points, fees and other expenses, providing the most accurate view of the costs a borrower might pay.

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Hal Bundrick is a staff writer at NerdWallet, a personal finance website. Email: hal@nerdwallet.com. Twitter: @halmbundrick.

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