Mortgage interest rates are they key to saving money when refinancing a mortgage. Currently, mortgage rates are near all time lows, and many people are taking advantage by refinancing into these ultra low rates. However, I predict that in mortgage rates will change, and I think I know when and how much. Here are my mortgage interest rate predictions for the rest of 2010, and how I made them.

While it is impossible to accurately predict anything, we do have some really good information and indicators to make an educated guess with. Throughout 2009 and even now, mortgage rates for traditional 30 year fixed rate mortgages have been near record lows. Many factors attribute to this including Government housing stimulus programs, and an eager need for mortgage lenders and banks to prevent foreclosures and restore stability to the housing market. Since so many people are having financial troubles, interest rates dropped to allow many to get a refinancing and prevent losing their home, save money every month, and secure their financial problems. This has led to an interest rate that was around 5% for a fixed rate mortgage. That is nearly half of what interest rates were only 10 years ago.

However, I think that 5% rate will rise throughout 2010. This will make refinancing a mortgage not so beneficial for many people, and will cost the others more money than it would have if they were to take action now. I predict that around April of this year, mortgage interest rates will rise around .75% bringing the total to 5.75%. While this is not an insanely high jump in interest rate, it will be followed in the following months with minor increases. The total mortgage rate increase by the time 2010 is over will be around 1.5%. This means I predict home interest rates will rise in 2010 ultimately resulting in a 1.5% increase.

I think that this will happen due to an improved housing market, lower foreclosure numbers, and better employment prospects for millions of homeowners. I think that the housing marker has seen its worst days, and the better ones will be coming this year. That means interest rates will rise as homeowners are struggling less, and require less assistance in saving their homes.

-M Petrone

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