How Are Mortgage Rate Predictions Created?

Mortgage rate prediction screen on laptop
Learn about mortgage types.

You have to use caution when listening to mortgage rates predictions. Some people use historical data to create predictions, many individuals use current economic trends, and others make predictions based on mere instincts.

Reasoning for Predictions

The most obvious reason why people seek out mortgage rate predictions is because they want to know if now is the time to get a mortgage loan or refinance, or if they should wait a little while in the hopes that rates will go down.

People with adjustable rate mortgages can also be quite interested in the direction mortgage rates are going because higher rates can mean a bigger monthly payment while lower rates can translate into a lower monthly payment.

Investors also follow interest rates quite closely in order to decide on strategic business decisions.

Mortgage Rates Predictions from Experts

Plenty of economic television shows feature predictions for which way the mortgage interest rate market is going. These shows are usually hosted by economic experts, or at the very least feature guests who are considered experts in the field. The content of these shows usually revolve around predictions based on several factors:

  • Historical Data: What happened the last time interest rates followed these trends?
  • Current Economic Climate: Are people borrowing money to purchase homes? Are banks lending money for mortgages?
  • Expected Changes on the Horizon: Is a major announcement about to be made regarding Federal interest rates? Is a person about to step down from a high economic position?
  • Gut Feeling: What general feelings do the experts have regarding the direction interest rates are going to take?

You can also find plenty of websites that feature predictions for mortgage rates from a wide variety of economic and mortgage experts. Some of the best online resources include:

Expert predictions are not infallible, no matter how many degrees the expert has or how impressive his or her credentials are. Predictions are nothing more than educated guesses, and should not be taken as absolute truth.

Make Your Own Predictions

You don't have to be a mortgage professional or an economist to get a general idea of what direction rates are going. The further out you try to span your mortgage rate predictions the less accurate your guesses will probably be. If you're only interested in what rates will be like in a couple of weeks, then you can take a look at an interest rate chart for the past couple of months to get a good idea of the direction rates are going.

Dramatic Changes

In the grand scheme of things, mortgage rates don't usually fluctuate dramatically. Rarely do mortgage interest rates experience huge leaps upward or downward.

People pay attention to even the most minute interest rate fluctuations because mortgage loans are spanned out over a long period of time, meaning even the smallest drop in interest rates can save money in the long run.

Don't watch the interest rate market expecting to see a huge fluctuation, like a three percent drop in mortgage rates. Such a drop would probably cause economic chaos, and is quite unlikely to occur at the spur of the moment.


While mortgage employees usually have a relatively accurate idea of where interest rates are - and where they may be heading in the immediate future - you should not put all your trust into what a bank representative tells you. Remember that it's the employee's job to talk you into borrowing money, so take all interest rate advice with a grain of salt.

You certainly shouldn't put a great deal of stock in alarmist ads, whether print or televised. No matter how loudly a mortgage lender yells, "Act now! Rates are about to rise!" the simple truth is that the lender is trying to get your attention and prompt you to call for a loan.

Always keep in mind that predictions are only guesses. There is no way to know for sure which direction rates will go, and how far they will rise or drop.

Was this page useful?
How Are Mortgage Rate Predictions Created?