bankrate survey: Cost of borrowing continues to fall

Cost of borrowing continues to fall

NORTH PALM BEACH — Fixed mortgage rates fell to the lowest level since September 2005, with the average conforming 30-year fixed mortgage rate now 6 percent, according to Bankrate.com's weekly national survey of large lenders.

That’s down from 6.17 percent a week ago and down from 6.66 percent four months ago.

The average 15-year fixed rate mortgage fell as well, to 5.68 percent. Even the average jumbo 30-year fixed rate joined the party, falling to 7.12 percent.

Adjustable mortgage rates were lower across the board, with the average one-year ARM inching down to 6.07 percent, and the average 5/1 ARM climbing to 6.1 percent.

The across-the-board decline on all types of mortgages is in contrast to the movements in recent weeks that saw conforming fixed rates moving lower but rates for adjustable mortgages and larger jumbo fixed rate loans moving higher.

However even with the declines, adjustable rate loans offer no bargains, with many initial interest rates higher than what a borrower could secure on a fixed rate loan.

Continued uncertainty about delinquencies and foreclosures as well as prospects for more interest rate action by the Federal Reserve, even beyond next week's scheduled meeting, are pushing Treasury yields and mortgage rates lower. Mortgage rates are tied to yields on long-term government bonds.

Just four months ago, the average 30-year fixed mortgage rate was 6.66 percent, meaning that a $200,000 loan would have carried a monthly payment of $1,285.25. Now that the average conforming 30-year fixed rate is 6 percent, the same $200,000 loan carries a monthly payment of $1,199.10.

Survey results:

— 30-year fixed: 6.00 percent, down from 6.17 percent last week (avg. points: 0.35).
— 15-year fixed: 5.68 percent, down from 5.85 percent last week (avg. points: 0.32).

— 5/1 ARM: 6.10 percent, down from 6.21 percent last week (avg. points: 0.27).

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.

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, sees mortgages continuing to fall or hold steady at worst.