Giving an accurate mortgage rates forecast is something that was not very difficult over the last eight months. You could pretty much say that rates were going down and you would have been correct. The question that many home owners and future home buyers are asking now is „is this going to continue or are interest rates headed higher?“ Many market mavens and financial pundits are forecasting that rates are going to head much higher because the ten year treasury yield has been in an uptrend for five months and rates have yet to recognize this.

Its actually good news that I predict mortgage rates will rise in 2010. Rising interest rats generally mean a market is growing, or recovering in this case. However, for the individual homeowner looking to refinance, any interest rate increase takes away some of the benefits of refinancing. For some people, after all the closing costs and other fees are paid off, a refinance may not even be a good thing to do because of the predict increase in interest rates in 2010.

For 2010 I predict that mortgage rates for a 30 year fixed rate mortgage, will be around 5.94% for most of the year. While that does not seem to much higher from the current average rate of 5.19%, it is much higher than rates that may be available early in 2010. Mortgage interest rates were recently increased from 4.69% to 5.19%. I thought this would happen as a response from mortgage lenders and banks who were over burdened with applications from hopeful homeowners looking to take advantage of the all time low interest rates. The rates were increased by .5% to stem the flow of refinancing and loan modification applications, but still keep a low enough rate to help a lot of homeowners save their home and avoid foreclosure.

I think this 5.19% rate will remain the same until mid October of 2009, then go back down to 4.69% from the middle of October through April 2010. Then the drastic rate increase of around 1.25% will take place as the housing market and economy show signs of recovery.

Homeowners should take some time and think about refinancing a mortgage now before my predicted rate increases take place. It is almost certain that interest rates will not be getting any lower than the near record lows they are at now. Homeowners are advised to take action, if they can, and refinance now to ensure the best deal, and biggest savings possible.

Learn more about Obama Mortgage Relief Plan Qualifications.