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Mortgage rates sink lower still [Updated]

August 19, 2010 |  9:50 am

The interest rate for a 30-year mortgage fell for the eighth time in nine weeks, according to a widely watched survey, with the record lows triggering the highest volume of home refinancing in 15 months.

Freddie Mac's weekly report on lenders said solid borrowers with 20% down payments or home equity were being offered 30-year fixed-rate loans at an average of 4.42% this week, down from 4.44% a week earlier. The borrowers would have paid 0.6% of the loan amount in upfront lender fees.

The average 30-year interest rate recorded by the survey has not risen in nine weeks, although it remained flat at 4.57% for the weeks ending July 8 and July 15.

The rate this week on 15-year fixed loans also edged down to an average of 3.90% compared with 3.92% the previous week, with 0.6% in lender fees.

Start rates on variable mortgages were unchanged at record low levels, according to Freddie Mac, the giant loan buyer and guarantor of mortgage bonds that has been operating under government conservatorship.

Savvy borrowers with solid credit and down payments often can get slightly better deals if they shop around for loans.

The rock-bottom rates boosted refinance activity last week to its highest level since May 2009, according to a weekly report on loan applications from the Mortgage Bankers Assn.

But demand for loans to purchase houses remained sluggish, as it has been since federal homebuyer tax credits expired in the spring. Just 18.6% of the applications were for purchase money loans, the trade group said.

-- E. Scott Reckard

[For the record, 9:52 a.m.: An earlier version of this story incorrectly reported that rates had fallen for nine straight weeks; they were unchanged in one of those weeks.]

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