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re: The 30Y Note Yield is back at 5% and mortgage rates are back above 7%.
Posted on 5/15/25 at 10:08 am to stout
Posted on 5/15/25 at 10:08 am to stout
So it looks like for the average borrower rates are 7.33% for a 30 year mortgage. Is this correct stout?
Grok:
"The average credit score is 711, mortgage rates as of May 15, 2025, vary slightly based on loan type and lender criteria. Based on available data, here are the estimated average rates for borrowers with a credit score around 700–719, assuming a 20% down payment. Sources note rates around 7.33% for a 700–719 score with 20% down, though this may reflect regional or lender-specific variations"
Grok:
"The average credit score is 711, mortgage rates as of May 15, 2025, vary slightly based on loan type and lender criteria. Based on available data, here are the estimated average rates for borrowers with a credit score around 700–719, assuming a 20% down payment. Sources note rates around 7.33% for a 700–719 score with 20% down, though this may reflect regional or lender-specific variations"
1
Posted on 5/15/25 at 10:12 am to John Barron
When you speak of rates, everyone assumes you are speaking of the average 30-year, which is not over 7%. Lender rates are higher for various reasons. One of those reasons being they sucker people into a higher rate to make money on the spread.
This post was edited on 5/15/25 at 10:17 am
Posted on 5/15/25 at 10:21 am to stout
quote:
When you speak of rates, everyone assumes you are speaking of the average 30-year, which is not over 7%.
I was always told those rates advertised are for credit scores above 760 which is not your average borrower. Your average credit score/average borrower is currently in the 710-720 range and those rates for the 30 year are 7.33%. Is that not accurate information?
This post was edited on 5/15/25 at 10:24 am
Posted on 5/15/25 at 10:24 am to John Barron
Everyone reports the average rate which is not over 7% as of now. Very close but not over
Posted on 5/15/25 at 10:40 am to stout
quote:
Everyone reports the average rate
That is not what I was told. I was told the rates you see advertised are for above average borrowers not the average borrower. I asked Grok and it says the same thing.
"Mortgage rates are often advertised as the best rates for borrowers with very good to excellent credit scores because lenders use these rates to attract attention and compete in the market.
Here’s why this happens:
Marketing Strategy: Lenders showcase the lowest possible rates to grab potential borrowers' attention. These rates are typically reserved for "prime" borrowers—those with very good credit scores (760+), low debt-to-income (DTI) ratios, and substantial down payments. It’s a way to make their offerings look more appealing compared to competitors.
Risk-Based Pricing: Mortgage rates are tiered based on risk. Borrowers with higher credit scores (760+) are statistically less likely to default, so lenders offer them lower rates. The “average” borrower, often with a credit score closer to 700 or below, poses a higher risk, so their rates are higher. Advertising rates for average borrowers wouldn’t be as eye-catching.
Fine Print Qualifications: Advertised rates come with strict criteria—high credit scores, 20%+ down payments, and low DTI ratios. Most borrowers don’t meet all these conditions, so their actual rate is higher. Lenders disclose this in fine print, but the headline rate is what draws people in.
Market Norms: The mortgage industry has standardized around advertising “best-case” rates because it’s what consumers expect to see. If a lender advertised rates for an average borrower (e.g., 680 credit score), they’d appear less competitive, even if those rates were more realistic for most people.
Posted on 5/15/25 at 10:44 am to John Barron
YOU WERE TOLD WRONG
Posted on 5/15/25 at 11:34 am to SDVTiger
quote:Facts were listed. What's "dumb" about that?
The ppl in the OP are very dumb
Posted on 5/15/25 at 12:31 pm to Big Scrub TX
quote:
Facts were listed
What facts? Rates arent over 7%
The 30yr rusing helps rates
The BLS's revisions are unreal and they cannot be trusted. A new data company needs to be used
They are acting like the credit rating agencies during the 2008 implosion
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