Mortgage rate roundup

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Interest Rate Roundup

By Daniel P. Ray, Ellen Cannon and Laura Bruce Bankrate.com
Mortgages
Rate: 6.31 percent (30-year fixed) Average points: 0.31

After rising for seven of the past eight weeks, rates fell precipitously. The Federal Reserve started the downdraft Jan. 31, when its rate-setting committee kept short-term interest rates unchanged and issued a benign assessment of the economy. "Readings on core inflation have improved modestly in recent months, and inflation pressures seem likely to moderate over time," the central bank said. Investors paid attention to the prospect of falling inflation, which caused bond yields and long-term mortgage rates to drop. The average 30-year fixed rate fell 0.11 percent to 6.31 percent. The average 15-year fixed, which is a popular option for refinancing, tumbled by the same amount to 6.08 percent. The jumbo fell even more by 0.15 percent to 6.48 percent. Adjustable-rate mortgages followed suit. The popular 5/1 ARM fell 0.13 percent to 6.17 percent, while the one-year ARM barely joined the party, falling just 2 basis points, to 6.04 percent.

Home equity products
Rates: 8.13 percent (line of credit); 7.9 percent (loan)

It's an oddity: The variable-rate product is stuck in place, while the fixed product is moving. How can that be? Home equity lines of credit are variable-rate loans. Although these rates can move, they won't do more than wobble a bit as long as the Federal Reserve leaves the federal funds rate alone. Lines of credit are pegged to the prime rate, which is tied to the federal funds rate set by the Fed. With the Fed inactive since June 2006, and looking like it's unlikely to take any rate action soon, don't look for line-of-credit rates to budge much in coming months. So it was this week: The average line of credit remained at 8.13 percent. It hasn't been below 8.13 percent or above 8.22 percent since July 2006. Home equity loans -- which are a fixed-rate product -- can have longer repayment terms, and they can be pegged to different long-term rates other than the Fed, so they may show more movement. So it was this week: The average home equity loan fell 0.03 percent to 7.9 percent.
The time is: 5:59:35 AM on Friday, February 16, 2007Next