Mortgage Rates Spread Widens as Lenders Cross 7% Threshold

Navy Federal Credit Union offers the lowest mortgage rate in the latest survey at 6.658%. This figure stands out in a market where many major lenders have crossed the 7% threshold. The data comes from a weekly survey of national lenders by GN auto markets/bonds: interest rates.

Wells Fargo sits at the bottom of the top ten list with a rate of 7.251%. The spread between the cheapest and most expensive options is 0.765 percentage points. This gap highlights the financial impact of comparing multiple offers before closing on a home loan.

Credit unions lead the rate rankings

Three credit unions occupy the top four positions in the current market. Navy Federal holds the lead with an APR of 6.658%. Better follows at 6.752%, and PenFed Credit Union ranks fourth at 6.838%.

Traditional banks trail these institutions in the ranking. Truist offers a rate of 6.909%, while Chase Home Lending quotes 6.929%. Citi Mortgage and Citizens Bank both list rates of 6.965%.

Treasury yields drive lender pricing

Ten-year Treasury rates have reached three-year highs. This rise in bond yields pressures mortgage lenders to adjust their pricing structures. Several major banks now offer rates above the 7% level as a result.

Bank of America, PNC Bank, and Rocket Mortgage did not rank in the top ten list. Flagstar Bank and U.S. Bank were not reporting new rates at the time of the survey. The market shows significant divergence in pricing strategies among national lenders.

APR reflects total borrowing costs

The Annual Percentage Rate includes both the interest rate and lender fees. This metric provides a more accurate measure of annual borrowing costs than the interest rate alone. Borrowers should compare APRs to assess the true cost of a loan.

Discount points can lower the interest rate by reducing the effective annual cost. One point costs 1% of the loan amount and typically lowers the rate by 0.25%. These fees are optional and can be removed from a loan estimate.