The Fine Print On “Record Low Mortgage Rate” Headlines

By TheBasisPoint, June 24th, 2010

Every Thursday, Freddie Mac releases its Primary Mortgage Market Survey (PMMS). This is the official record on mortgage rates and source material for the overwhelming majority of rate reports in the media—reports that very often exclude critical details rate shoppers need to know. Since the one-day market crash May 6, mortgage bonds have rallied to insane levels and mortgage rates have dropped to new record lows several times. So news stories about record low rates hit at the end of each week, but they are for rates that were available the previous week. And only if you have a single family home, and a loan of $417,000 or less, and lots more fine print. Below is a checklist of characteristics used in the Freddie Mac PMMS survey, so you know if these rates apply to you or not.

PMMS rates reported in the press each Thursday are for the week leading up to (and not including) Thursday. Mortgage rates are tied to mortgage bond trading, and as such, rates change all day everyday. The Thursday PMMS report on rates is for rates that are long expired, so it’s critical to get market-relevant quotes from a mortgage lender, not a news source. Also below are some other useful links for understanding rate quotes and rate locks.

PMMS rates are on Conforming loans up to $417,000. Super-Conforming loans up to $729,750 are excluded. Jumbo loans above $729,750 are excluded.
PMMS rates are on Conventional loans, and exclude FHA loans.
PMMS rates are for single family homes, and exclude other property types like condos and duplexes.
PMMS rates are for borrowers with at least 20% equity in their homes.
PMMS rates are for owner-occupied homes.
PMMS rates always include points to buy down the rates. Many press reports exclude this fact. This is the source that shows the points.
PMMS rates are national averages based on survey responses from 25 lenders located in Freddie Mac’s 5 regions.

Here are some other links on the topic of rate quotes and rate locks. You can also click the Topics links in post footer to dive in deeper to current rate perspective.

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