Do mortgage rates follow the Fed rate?

Do mortgage rates fall when the Fed reduces rates?

The Fed rate cut will affect the short-term lending rates. However, most fixed-rate mortgages are based upon long-term rates which don't fluctuate as often as short-term rates. In general, adjustable rate mortgage (ARM) payments will drop when the Fed reduces rates.

The next question is: What factors influence mortgage interest rates? These are seven key factors that can affect your interest rates that you need to know

• Credit scores. One factor that can impact your interest rate is your credit score.
• Your home location.
• The loan amount and the home price.
• Deposit payment.
• The loan term.
• Type of interest rate
• Type of loan

You might also wonder, "What are the mortgage rates?"

The basic rules of supply-and-demand are the basis for mortgage rates. Inflation, economic growth, Fed's monetary policies, as well as the state of bond and housing markets all play a role. Your financial health will have an impact on the interest rate you get.

Are the federal government lowering mortgage interest rates?

Wednesday's Federal Reserve cut its benchmark interest rate by quarter percent for the third consecutive month. This move will likely further reduce borrowing costs for credit cards, home equity lines and adjustable-rate mortgages, as well as auto loans.