can anyone predict rates going any lower?

I would suggest you keep shopping because if you are dead set on an I/O and understand the risks vs reward, there are better jumbo I/O rates available.

Well you did not mention what your amortization is...30 yr. etc. Rates have moved back down to 2011 lows. One can never predict exactly how low they will go or when they will bounce back up. Basic answer is if you are happy with the numbers then it could be the time to lock. You LO should be able to advise you as I do with my clients. My other question is why the I/O with the rates being as low as they are? Are your plans short term for this purchase? If not, fully amortizing may be the way to go...just food for thought....

hi there:I am assuming that you are in a high conforming balance county, if so Interest Only right now is in the mid 3%.. If over 729K non high balance county, then 5 yr I/O would be around the same. As for as rates going lower, I monitor the 10 yr bond. You can lock and see if lender will allow a float down. With us, we can re-negotiate the rate with our pricing and can provide a borrower credit at closing. References available Upon Request.

No one can predict for sure what will happen with mortgage rates. There are too many variables.

You mention moving in less then 5 years, at that rate what is the break even point to cover your closing costs? What would the rate be if you build the closing costs into it? What would the rate/payment be on a 5/1 ARM vs the Interest only? Do you plan to sell the property when you move or retain it as an investment property? These are all topics you should discuss with your loan originator to determine the best path or if refinancing even makes sense based on your long term goals.

Anyone that tells you they can prdictthe direction of rates is lying to you. There can be educated opinions about the direction of the interest rate markets but no one can say they can predict the direction of rates.