HECM Rates Rise Slightly
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Interest rates for both monthly- and annual-adjusting [tag]Home Equity Conversion Mortgages[/tag] (HECM) rose slightly in the most recent week while rates on the Fannie Mae Home Keeper reverse mortgage fell. [tag]HECM[/tag] rates remain relatively high being well above the average for the year and about 20 basis points (0.20%) from their 52-week high level.
[tag]Reverse mortgages[/tag] are specialized [tag]mortgage products[/tag] available only to [tag]senior citizen[/tag] homeowners. HECMs are the most popular type of reverse mortgage. Interest rates for both annual- and monthly- adjusting HECM loans are indexed to the one-year constant maturity [tag]US Treasury rate[/tag].
Under a reverse mortgage, the lender makes loan payments to the borrower and the loan is repaid when the house is sold or the homeowner dies. The monthly or annually adjusting interest rate determines how fast the loan balance grows.
Rates on the [tag]Fannie Mae[/tag] Home Keeper, another reverse mortgage program, dropped this past week from their 52-week high level of 8.75% to 8.625%. The underlying rate for Home Keeper loans dropped by only one basis point (from 8.69% to 8.68%), but because Home Keeper Rates are rounded to the nearest 1/8 percent, the drop for borrowers was more pronounced.
| Reverse Mortgage Rates | |||||
|---|---|---|---|---|---|
| Product | This Week | Last Week | 52-Week Avg |
52-Week High |
52-Week Low |
| HECM Monthly Adjusting | 6.57% | 6.55% | 6.32% | 6.77% | 5.80% |
| [tag]HECM[/tag] Annual Adjusting | 8.17% | 8.15% | 7.92% | 8.37% | 7.40% |
| [tag]Fannie Mae[/tag] [tag]Homekeeper[/tag] | 8.625% | 8.75% | 8.29% | 8.75% | 7.50% |
Visit our reverse mortgage interest rate tool for further information and analysis.
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