reddie Mac Rates on 30 Year Fixed Mortgages Fall

Associated Press

Rates on 30-year-fixed mortgages fell this week, offering homebuyers a chance to refinance their loans, Freddie Mac said Thursday. The average rate on a 30 year fixed mortgage dropped to 5.16% this week from 5.25% last week. A year ago, the 30 year fixed-rate mortgage averaged 5.72%. Freddie Mac Chief Economist, said interest rates for 30 year fixed rate mortgages are almost 1.5% points below last year's peak set in late July offering many homeowners an incentive to refinance. The new rate translates into a monthly payment savings of about $108 on a $200,000.00 loan. Average rates for 30 year fixed mortgages have been rising since hitting a record low of 4.9% a month ago, a decline attributed to the Federal Reserve's move to buy $500 billion in mortgage-backed securities to spur lending by banks. In late January, Freddie Mac reported that US homeowners took out $17.5 billion and home equity in the fourth quarter by refinancing their mortgages, the lowest amount since the first quarter of 2001. The average rate this week on a 15 year fixed-rate mortgage was 4.81% Freddie Mac said down from 4.92% last week and 5.2% a year ago. Average rates on five-year, adjustable-rate mortgages fell slightly to 5.23% from 5.26%. Rates on one-year adjustable-rate mortgages rose slightly to 4.94% from 4.92% last week. The rates do not include add-on fees known as points. The nationwide fee for 30 year and 15 year mortgages averaged 0.7 for this week. Fees for five-year adjustable-rate mortgages averaged 6/10 of a point and 0.5 for one year adjustable rate mortgages. Freddie Mac and sibling company Fannie Mae own or guarantee about half of the $11.5 trillion in US outstanding home loan debt. The government seized control of the companies in September.