May 27, 2010
Thanks to a collapsing euro, which has pumped billions into U.S. dollars, mortgage rates have fallen to a new record low, hitting 4.92 percent for a 30-year fixed rate loan, according to BankRate.com.
The average 15-year fixed mortgage held steady this week at 4.34 percent, as did the larger jumbo 30-year fixed rate at 5.75 percent. Adjustable rate mortgages rose this week, with the average 3-year ARM climbing to 4.52 percent and the 5-year ARM rising to 4.26 percent.
The angst of investors around the globe about European debt, slower growth in China, and saber-rattling on the Korean Peninsula all feed into what is known as the "fear trade." That fear trade has helped bring yields on U.S. Treasury securities considerably lower and mortgage shoppers have been direct beneficiaries. Mortgage rates are closely related to yields on long-term government bonds and nervous investors equate to lower mortgage rates.
The last time mortgage rates were above 6 percent was Nov. 2008. At that time, the average rate was 6.33 percent, meaning a$200,000 loan would have carried a monthly payment of $1,241.86. With the average rate now 4.92 percent, the monthly payment for the same size loan would be $1,063.89, a savings of $178 per month for a homeowner refinancing now.
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.
