Bankrate: Mortgage Rates Flirt with Record Lows

Mortgage rates fell sharply in the first week of 2009, with the average 30-year fixed mortgage rate plummeting to 5.33 percent. According to Bankrate.com’s weekly national survey, the average 30-year fixed mortgage has an average of 0.39 discount and origination points.

The average 15-year fixed rate mortgage dropped to 4.85 percent, while the average jumbo 30-year fixed rate slumped to 6.91 percent. Adjustable rate mortgages were mixed, with the average 1-year ARM inching higher to 5.98 percent and the average 5/1 ARM pulling back to 5.72 percent.

Mortgage rates fell sharply as the Federal Reserve initiated a program of mortgage bond purchases. The average 30-year fixed mortgage rate is at the third lowest point ever, 5.33 percent. The two prior occasions when rates were lower both occurred in June 2003. Low mortgage rates will be a theme in 2009 as Fed and Treasury policies aim to stabilize the housing market by facilitating refinancing and enticing home buyers into the marketplace.

The sharp decline in mortgage rates since Halloween has sparked a refinancing frenzy. In late October, the average 30-year fixed mortgage rate was 6.77 percent, meaning a $200,000 loan would have carried a monthly payment of $1,299.86. With the average rate having since fallen to 5.33 percent, the monthly payment on a $200,000 loan is now $1,114.34.

SURVEY RESULTS
30-year fixed: 5.33% — down from 5.64% last week (avg. points: 0.39)
15-year fixed: 4.85% — down from 5.16% last week (avg. points: 0.38)
5/1 ARM: 5.72% — down from 5.86% last week (avg. points: 0.47)

Bankrate’s national weekly mortgage survey is conducted each Wednesday from data provided by the top 10 banks and thrifts in the top 10 markets.

For a full analysis of this week’s move in mortgage rates, go to http://www.bankrate.com/mortgagerates

The survey is complemented by Bankrate’s weekly forward-looking Rate Trend Index, in which a panel of mortgage experts predicts which way the rates are headed over the next 30 to 45 days. A plurality of panelists, 42 percent, predict rates will continue falling. One in three expect rates to rebound, while the remaining 25 percent believe rates will remain more or less unchanged.

For the full mortgage Rate Trend Index, go to http://www.bankrate.com/RTI

About Bankrate, Inc.
The Bankrate network of companies includes Bankrate.com, Interest.com, Mortgage-calc.com, Nationwide Card Services, Savingforcollege.com, Fee Disclosure, InsureMe CreditCardGuide.com and Bankaholic. Each of these businesses helps consumers to make informed decisions about their personal finance matters. The company’s flagship brand, Bankrate.com is a destination site of personal finance channels, including banking, investing, taxes, debt management and college finance. Bankrate.com is the leading aggregator of rates and other information on more than 300 financial products, including mortgages, credit cards, new and used auto loans, money market accounts and CDs, checking and ATM fees, home equity loans and online banking fees. Bankrate.com reviews more than 4,800 financial institutions in 575 markets in 50 states. In 2007, Bankrate.com had nearly 60 million unique visitors. Bankrate.com provides financial applications and information to a network of more than 75 partners, including Yahoo! (NASDAQ:YHOO) , America Online (NYSE: TWX) , The Wall Street Journal and The New York Times (NYSE:NYT) . Bankrate.com’s information is also distributed through more than 500 newspapers.