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How do Treasury Notes and Treasury Bonds Affect Mortgage Rates?

by green927 from Ballouville, Connecticut. Feb 14th 2018 Reply


William J Acres (William_Acres)
#1 ranked lender in Arizona - 8,428 contributions

The only similarity to Mortgage Backed Securities and Treasury bonds, is they are both within the bond market, but they have absolutely nothing to do with mortgage rates. Mortgage rates are driven by the pricing of Mortgage Backed Securities ( a bond).. This is the job of Fannie Mae and Freddie Mac.. they are the clearing house for MBS's... They buy loans, package them up in bundles and then sell securities against the performance of the notes contained in the bundle.. Typically, when stocks are souring, the the bond market get's ignored.. in order to attract investors, they have to raise the yield.... thus, rates go up.. but when stock prices go down, then investors flock to the bond market,, Thus, they can lower the yield they pay, resulting in lower interest rates.. There are other factors that go into mortgage rates, but MBS bond pricing is the main driving force. I'm a preferred Lender with California and Arizona being my primary markets. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. 480-287-5714 WilliamAcres.com NMLS# 226347 / RPM Mortgage NMLS 1541014 / AZMB0121893

Feb 16th 2018
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