2015 has been a banner year for the banks in terms of Jumbo lending. Most jumbo loan amounts begin when Fannie and Freddie limit their loans at $417,000. However on California, many counties offer conforming loans up to $625,000. This used to be considered a benefit because Fannie Mae loans offered lower rates than Jumbo loans. This is no longer true and you can find jumbo loans on a 30 year fixed for as .25% lower than the conforming rate.

It seems that some retail regional lenders are beating the major banks on rate as well. A recent survey by Checkrates.com in the bay area compared the rates of Wells Fargo, Bank of America, Citimortgage, and Chase to a few smaller lenders like Parkside lending consistently beat the major banks by .125% to .25% on many days.

As Fannie Mae and Freddie continue to increase fees, while the MBS market is continuing to pay generous spreads to the non-conforming loans, we expect the “Jumbo rate advantage” to continue for years to come.