We came across this graph in a newsletter put out by MBIA (the large municipal bond insurer):

The graph is of interest to potential reverse mortgage borrowers for a couple of reasons. First, it highlights a close correlation between movements in the Consumer Price Index (CPI) with the 10-year Treasury Rate. Recall that the 10-year Treasury Rate is the index used for the HECM program’s “expected” rate. The “expected rate” is a big factor in determining how large your reverse mortgage will be. In simplest terms, the lower the expected rate the larger reverse mortgage loan amount you’ll qualify for.

Of immediate interest is the far-right portion of the graph which shows a recent sharp fall-off in the CPI (mainly due to falling energy prices) but a lesser decline in the 10-year Treasury rate. What might be very interesting in the current market is whether the sharp retreat in the consumer price index will be followed in coming weeks with a sharp fall in the 10-year Treasury.

According to figures released today (12/11/06), HECM expected rates dropped only slightly in the most recent week. Expected rates fell only 1 basis point following a sharper 9 basis point drop in the previous week. Still, if you are in the market for a reverse mortgage, it is smart to keep a close eye on this trend.

Reverse Mortgage Rates
Rate	This Week	Last Week	52-Week Avg	52-Week High	52-Week Low
HECM Expected - Monthly	5.98%	5.99%	6.283%	6.72%	5.86%
[tag]HECM[/tag] Expected - Annual	7.58%	7.59%	7.883%	8.32%	7.46%

For more information on current reverse mortgage interest rates and historic trends, see our reverse mortgage interest rate tool.

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A Few More Related Articles of Interest:

PLL - Principal Limit Lock

T-rate Index - Treasury Rate Index

Reverse Mortgage Rate Analysis - Monthly vs Annual HECM

Reverse Mortgage Rates come down

Reverse Mortgage Interest Rate