How Often Do Mortgage Rates Change? Best Days to Lock

Monday is the best day to lock-in mortgage rates; Wednesdays are risky

Mortgage rates are in constant flux, even changing multiple times a day. This volatility can make it challenging to know when to lock in your rate.

So, what’s the best day to lock a mortgage rate? MBSQuoteline data shows that rates are steadiest on Mondays, ideal for risk-averse borrowers, and most volatile on Wednesdays, which can offer lower interest rates for risk-tolerant borrowers but also carries the risk of higher rates.

Here’s what home buyers and homeowners need to know about locking-in ever-changing mortgage rates.

In this article (Skip to...)

• Mortgage rate changes
• Best day to lock rates
• Current rates
• Refinance rates
• Rate locking
• FAQ

How frequently do mortgage rates change?

Mortgage rates can change on a daily basis, and sometimes even hourly. These changes affect both home purchase and refinance transactions, as rates for both types of loans follow the same market trends.

While the exact rate you’re offered may vary slightly between a purchase and refinance, the general direction and magnitude of rate changes will be similar for both transaction types.

Why do mortgage rates change?

Mortgage rates are influenced by a complex interplay of economic factors and market forces, which can cause them to change daily. Some of the key drivers include:

• Economic conditions and outlook: The overall health and future prospects of the economy significantly impact rates.
• Inflation rates: Higher inflation typically leads to higher mortgage rates.
• Federal Reserve policy and Fed Funds rate: While the Fed doesn’t directly set mortgage rates, its policies strongly influence them.
• 10-year U.S. Treasury bond yields: Mortgage rates often follow the direction of these benchmark bond market yields.
• Major world events: Elections, wars, and natural disasters can all impact rates by affecting the broader financial markets.
• Mortgage loan type: Different types of loans, such as conventional, FHA, VA, or jumbo, can carry different interest rates based on their unique risk profiles for mortgage lenders.

While these high-level factors set the overall backdrop for mortgage rates, the day-to-day movements are determined by the prices of mortgage-backed securities (MBS) on the bond market. Here’s how it works:

• Mortgages are packaged together into mortgage-backed securities, which are bonds that trade on the financial markets like stocks
• When demand for MBS is high and investors are buying, prices rise. When demand falls, prices drop.
• Mortgage rates move inversely to MBS prices. When MBS prices go up, mortgage rates fall. When MBS prices decline, rates rise.

So in the end, the same factors that impact the broader bond markets, like the economic factors listed above, filter through to drive the appetite for MBS. This in turn determines the interest rates available to borrowers seeking mortgages, which can affect home prices and affordability over the life of the loan. Using a mortgage calculator can help you estimate your monthly payments under different rate scenarios.

The key takeaway is that mortgage interest rates are in a constant state of flux based on the ever-changing economic landscape and housing market conditions. Locking your rate at the right time against this backdrop is crucial to securing the best deal, whether you’re considering a short term or long-term mortgage.

Best day to lock-in mortgage rates

So, now that we know how mortgage interest rates work, which days are the best for locking them? To find out, we enlisted the help of MBSQuoteline, provider of real-time mortgage market pricing.

Here’s what the data showed:

• Monday: 17.3 basis point change, on average
• Tuesday: 20.3 basis point change, on average
• Wednesday: 23.8 basis point change, on average
• Thursday: 20.1 basis point change, on average
• Friday: 23.6 basis point change, on average

In general, 25 basis points equates to a 0.125 percentage point change in mortgage rates.

This data shows that rates tend to be most stable on Mondays, making it a good day for risk-averse borrowers to lock in a rate. Meanwhile, Wednesdays and Fridays see the most volatility, which could provide an opportunity for risk-tolerant borrowers to catch a lower interest rate, but also carries the danger of rates moving higher.

Rate lock tip: If you’re risk-averse and want to play it safe, consider locking your rate on a Monday when rates are most stable. If you have some risk tolerance and want to try for the lowest possible rate, floating your rate and keeping an eye on the market mid-week, especially on Wednesdays, could pay off—but be ready to lock quickly if rates start to rise.

Why Monday is the best day to lock mortgage rates

It’s no accident that Wednesdays and Fridays are most volatile, either. These two days coincide with some of the most important news to affect MBS pricing and the markets.

• The Federal Reserve adjourns from its FOMC meetings on every sixth Wednesday, for example, and when the Fed meets, mortgage rates can change in a hurry.
• Additionally, the Bureau of Labor Statistics releases its Non-Farm Payrolls report on the first Friday of each month. The jobs report also has an outsized effect on mortgage-backed securities, which can lead to volatile Fridays.

As for Mondays, there’s not much news released to start the week, which may be why Mondays are the calmest of all days for mortgage rates.

Current mortgage rates

The type of loan you choose can have a noticeable impact on your mortgage rate. Here’s a breakdown of typical rate trends for the most common home loan types:

*Current mortgage rates and annual percentage rates for sample purposes only. See our full list of interest rate assumptions here.

Conventional loans typically offer the lowest interest rates for well-qualified borrowers, while government-backed FHA and VA loans may have slightly higher rates but more lenient credit and down payment requirements. Jumbo loans, which exceed conforming loan limits, usually carry higher rates due to their larger size and lack of government backing.

What is a mortgage rate lock?

A mortgage rate lock is an agreement between you and your lender that guarantees a specific interest rate for a set period, typically 30, 45, or 60 days from origination. Locking your rate protects you from market fluctuations during the lock period. Even if rates rise, your lender must honor your locked rate as long as you close within the specified timeframe.

You may also have the option to buy down your interest rate with discount points.

How long can you lock a mortgage rate?

While 30 days is the most common lock period, longer durations are available if needed, usually in 15-day increments up to 90 days. Beyond that, you can lock for 30-day periods up to 360 days.

However, longer locks come at a cost. Rates typically increase by 0.125% for each 15-day period beyond the standard 30 days. For locks over 90 days, expect both higher interest rates and upfront fees— up to 1% of your mortgage loan amount.

Do you need a long rate lock?

Most buyers won’t need a rate lock longer than 60 days. Even when buying new construction, locking for 360 days is often not advisable due to the added costs. Some mortgage lenders offer 60-day locks with no added fee, so shopping around is crucial.

It’s important to note that rate locks apply to both home purchases and refinancing transactions.

Refinance rates: How they compare to purchase rates

While refinance rates follow the same general real estate market trends as purchase rates, there are some key differences to be aware of:

• Refinance rates are often slightly higher than purchase rates. This is because lenders view refinances as somewhat riskier. There’s a higher chance that homeowners will refinance again if rates continue to drop, which cuts into the lender’s profitability on the home loan.
• The type of refinance also matters. Cash-out refinances, where you tap into your home equity, usually have higher rates compared to rate-and-term refinances due to the added risk for lenders.
• The day-to-day changes in refinance rates mirror those of purchase rates closely. So the same factors and timing strategies that apply to locking a purchase rate also hold true when refinancing.

Additionally, mortgage lenders often require a “seasoning period” of 6-12 months before new homeowners can refinance a loan. Refinancing too soon after closing can result in higher rates or fees.

When considering a refinance, a common rule of thumb is to look for a rate that’s at least 0.5-1 percentage point lower than your current rate. However, the exact breakeven point depends on your specific loan details and closing costs, including any ongoing mortgage insurance.

Keep in mind that refinancing also resets your mortgage loan term, which can impact your long-term interest costs and monthly mortgage payments.

Strategies for timing your mortgage rate lock

Once you understand how often mortgage rates change and what influences them, you can put that knowledge to work when deciding when to lock your rate. Here are some key strategies.

Shop around for the best mortgage rates

Getting quotes from multiple lenders is crucial to finding the most competitive rate. Don’t assume all lenders will offer you the same rate. Compare offers to ensure you’re getting the best deal. Pay attention to each mortgage lender’s lock policies, as these can vary significantly.

Assess your risk tolerance

Deciding when to lock your rate often comes down to your personal risk tolerance. If you prefer certainty, locking as soon as you’re comfortable with the rate may be the right choice. If you’re willing to risk rates moving higher for a shot at catching a dip, floating your rate could pay off, but be prepared for the possibility of rates rising.

Consider your closing timeline

Your expected closing date should play a key role in your rate lock decision. Most lenders offer lock periods of 30, 45, or 60 days. Make sure to choose a lock period that gives you a buffer for your closing date in case of delays. You don’t want your lock to expire before closing.

Know your credit score and loan details

Having a clear picture of your credit profile, debt-to-income ratio (DTI), and key home loan characteristics will help you get accurate rate quotes. Your credit score significantly impacts the rates you’ll be offered, so check your credit report and correct any errors.

FAQ: How often do mortgage rates change?

What are mortgage rates today?

Mortgage rates change daily, and some days, they change more than others. That said, each day you’re “floating” poses a risk to your finances. It’s often better to be locked.

Ready to lock in your mortgage rate? Compare offers from top lenders and find the right deal for your personal finances.