Predicting current mortgage rates is very risky business. The system that exists in financial market is very chaotic. This is because there is no proper order and there is no set formula to calculate the current mortgage rate. Mortgage rate predictions are like the weather predictions which may right or may not. It is only next to impossible to accurately predict the current mortgage rate. In mortgage rate prediction there is great margin of error.



Yet there are few positive facts. Let’s discuss about it here. Any system that is chaotic can be predicted in broader terms. Though it may not be possible to predict the temperature accurately on a given date of a month, one can very well predict the range of temperature fluctuation for a period of time, let’s say a week or fortnightly. Just like the climate which gives broad indicator for the top temperature in summer, economic climate gives indicator for mortgage rates.

There are two interest rates; they are real interest rate and nominal interest rates. Real interest rate changes in response to the supply and demand and not affected by the inflation. The mortgage rate will depend on the both interest rate mentioned above. Hence by simply adding the annualized percentage rate of inflation one can predict the mortgage rate to some extend.

Reduced availability of credit will increase the mortgage rate. More the availability of money, lesser will be the rate interest and vice versa. Increased risk in the other factor which affects the mortgage rate. The over risk involved in the housing market have a say in the mortgage rate. If the risk is more at that point of time, the mortgage rate will certainly be more.

In case the house value plummets in any part of the world and the banks will certainly like to charge increased mortgage rate to cover up the possible loss of money. Hence based on the information provided here one can predict the current mortgage rate closer to reality if not very accurate