Home Mortgage Loan Rates go up and down because of a numbe for factors.  Is it the Fed? The economy? Inflation? The banks? The President? Fannie Mae or Freddie Mac? Is it a secret conspiracy

There are several reasons people consider refinancing, one of which is to take advantage of lower interest rates to either decrease their monthly mortgage payments, or shorten the terms of their loan.

Mortgage money can come from many sources, including deposits at banks and brokerages, but most comes from investors through what is collectively known as the "capital markets." This is where investors interested in purchasing certain kinds of debt instruments -- bonds, in this case -- come to buy these items.

One of the keys to refinancing is watching interest rate fluctuatations. Securing a low rate is not always easy. Daily bond fluctuations can serve as good indicators of the direction interest rates may be moving. However, since you can never be too sure, you may wish to lock in the lowest rate you see, which you can do more than a month before

Relationships to Other Investments

Home Mortgages are priced for sale to attract investors who seek fixed income investments. There are many kinds of bonds available, and mortgage rates (yields) rise and fall with those competing investments to a greater or lesser degree.

But how to price them? Fixed mortgage rates, like other bonds, track US Treasury bonds quite well. Since Treasury obligations are backed by the "full faith and credit" of the United States, they are the benchmark for many other bonds.