Rates Fall Again, Refinancing Surges

By:: Kara Johnson | January 18, 2012

Homeowners rushed to take advantage of falling interest rates last weeks, as applications to refinance a mortgage reached their highest level in six months.

Mortgage refinance applications jumped more than 26 percent last week, according to figures released today by the Mortgage Bankers Association (MBA), as conventional mortgage interest rates fell to their lowest levels on record.

Demand for home purchase loans also increased by more than 10 percent on a seasonally adjusted basis from the week before, and were up 2.2 percent from the same week one year earlier.

30-year rates fall to 4.06 percent

Average interest rates on 30-year fixed-rate mortgages dropped to 4.06 percent, down from 4.11 percent previously, with an average of 0.41 points in origination and discount fees. That’s the lowest 30-year rate ever reported in the MBA survey.

New record lows were also set on FHA mortgage rates and 15-year fixed-rate home loans. The MBA reports that FHA rates fell to 3.91 percent with on 30-year loans, down from 3.96 percent previously and with 0.59 points in fees and discounts. Average rates on conventional 15-year fixed-rate dropped to an MBA record low of 3.33 percent and 0.39 points, down from 3.40 percent the week before.

Jumbo mortgage rates up

Going against the trend were 30-year jumbo mortgages (loan amounts exceeding $417,500), which increased to an average of 4.40 percent and 0.37 points, up from 4.34 percent the previous week. Initial rates on 5-year adjustable rate mortgages (ARMs) were unchanged at 2.90 percent, based on 0.39 points.

One point equals one percent of the loan amount, or $1,000 for every $100,000 borrowed. Points reported include origination fees and discounts paid to obtain a better interest rate. Rates are based on an average 80-percent loan-to-value ratio.

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National Rates

Loan Type	Today	+/-
30 yr fixed	3.81
15 yr fixed	3.15
5/1 ARM	2.73

Rates may contain points

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