The Published Mortgage Rate That Nobody Gets

November 06, 2020 by Dan Green

Government-backed mortgage group Freddie Mac publishes its Primary Mortgage Market Survey (PMMS) each Thursday.

The report, which lists the average current mortgage rates for 30-year fixed rate mortgages, the 15-year fixed-rate mortgages, and 5-year ARMs, has been published weekly since 1971.

Freddie Mac mortgage rates are widely-used by economists, statisticians, and policy-makers — but don’t expect to get access to them as a consumer.

Because Freddie Mac mortgage rates aren’t “real.”

The interest rates listed in the Freddie Mac PMMS are composites, based on data from more than 100 U.S. lenders. Also, they use a specific borrower scenario that’s probably different from yours.

The rates shown by Freddie Mac assume all of the following:

  • Purchase transaction, not a refinance
  • 740 credit score or higher, not even a little bit lower
  • Detached, 1-unit home, not a 2-4 unit or a condo
  • Loan size of $250,000
  • Conventional mortgage, not an FHA, VA, USDA, or niche mortgage loan

The Freddie Mac rates apply to these loan traits only. They also assume that you’re going to live in the home you purchase; that you’re closing in 30 days; and, that you’re opting to pay a small number of discount points.

There is a significant set of assumptions, and almost nobody fits the Freddie Mac profile — especially first-time home buyers who are considered low-down payment mortgages such as HomeReady® and HomePossible® which both allow for 3% down.

Mortgage rates are not one-size-fits-all.

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