McLEAN, Va. - Rates on 30-year, fixed-rate mortgages fell this week, offering homeowners a chance to refinance their loans,
The average rate on a 30-year fixed mortgage dropped to 5.16 percent this week from 5.25 percent last week. A year ago, the 30-year, fixed-rate mortgage averaged 5.72 percent.
Frank Nothaft, Freddie Mac's chief economist, said interest rates for 30-year, fixed-rate mortgages are almost 1.5 percentage 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 $188 on a $200,000 loan, Nothaft said.
Average rates for the 30-year mortgages had been rising since hitting a record low of 4.96 percent 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 in 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 percent, Freddie Mac said, down from 4.92 percent last week and 5.25 percent a year ago.
Average rates on five-year, adjustable-rate mortgages fell slightly to 5.23 percent from 5.26 percent. Rates on one-year, adjustable-rate mortgages rose slightly to 4.94 percent from 4.92 percent 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 point for this week.
Fees for five-year adjustable rate mortgages averaged sixth-tenths of a point, and 0.5 point for one-year adjustable rate mortgages.
