Yale Roth M.A., M.Ed

This is a one of the most frequent mortgage rate questions I get.

Mortgage rates can change every day, and even sometimes during the middle of the day.  What?  I know you’re thinking the mortgage process is already confusing and stressful – now you have to focus on mortgage rates changing on you when your ready to lock the mortgage rate in.

I know this can be distressing, especially for those of you who are in the process of locking your mortgage rate.  I’ve been there as consumer when securing a mortgage rate for my home.

Have you ever experienced being quoted a rate and fee and the next day, when you’re ready to lock the mortgage rate, it’s higher or the fee to get it has increased?  You’re probably thinking, “That dirty loan officer, their baiting and switching me.”

In all likelihood, you aren’t being baited and switched.

The mortgage rates can change daily.

What drives them is the trading of mortgage bonds.

Mortgage bonds trade every day, just like stocks trade every day.

Depending on what is happening in the bond market will determine the mortgage rates and lender costs to get that mortgage rate.

So mortgage rate sheets are generated every morning after the bond market opens.  The mortgage rates and lender fees are set for that day.

Now the bond market – like the stock market – can be a volatile place.

Sometimes there can be a rally where a lot of money flows into the bond market during the day, causing what’s called an “intraday reprice for the better.” 

That means that the mortgage rates could have dropped or the cost to get the mortgage rate has dropped during the day.  It’s a good thing for people shopping for mortgages when this happens!

In contrast, money can leave the bond market in a big way – for whatever reason – causing an intraday reprice for the worse.

That means that mortgage rates can go up during the day or the cost to get a mortgage rate can go up.

So, intraday mortgage price changes don’t occur that often but they do take place – so don’t always jump on your loan officer or mortgage broker if the mortgage rate quote you were given has changed for the worse.

Now you know that mortgage rates can change daily and sometimes during the middle of the day and why mortgage rates change.

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