Understanding Mortgage Pricing

Daily pricing for conforming A paper loans is determined by mortgage-backed securities, not the Treasury market.  Mortgage companies watch the market trade until 10:00 a.m. ET before determining daily price changes. Most mortgage companies/wholesalers watch market activity for over an hour each day before setting daily pricing. Mortgage companies commonly set daily pricing at 10:00 am eastern.

The Treasury market opens at 8:30 am and the mortgage-backed securities begin to trade at approximately 8:40 am each day. Many economic reports are released at 8:30 am eastern time, so wide price swings are not uncommon directly following the market open There is an inverse relationship between the price of bonds and the movement of interest rates. As interest rates rise, the price of bonds falls and vice versa.

Staying in touch with your Maine Mortgage Banker is the key to locking in at the right time.

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