Earlier this past year, the yield on the 10 year Treasury dropped to almost 2.0 percent, a level never experienced before.  This is a very important factor for refinancing rates as the treasury yield, combined with the mortgage spread, amounts to the refinance mortgage rate that the end consumer will be offered.

 

As the treasury yield neared 2.0 percent, the national average mortgage rate for a 30 year fixed home loan stood at near 5.0 percent, which equates to a mortgage spread premium of nearly 3.0 percent.  Thankfully for those shopping for low home loan refinancing rates, the mortgage spread premium has declined as the treasury yield has increased.  With the treasury yield currently holding near 3.5 percent, the national average 30 year fixed rate mortgage is near 5.5 percent, resulting in a lowered mortgage premium of 2.0 percent.  Without the decline to the mortgage spread, refinancing rates could be at 6.5 percent today.