Bankrate: Mortgage Rates Stuck in a Holding Pattern

January 20, 2011

NEW YORK, N.Y. – January 20, 2011 – (RealEstateRama) — Mortgage rates showed little movement this week, with the benchmark conforming 30-year fixed mortgage rate nosing higher to 4.95 percent according to Bankrate.com’s weekly national survey. The average 30-year fixed mortgage has an average of 0.4 discount and origination points.

To see mortgage rates in your area, go to http://www.bankrate.com/funnel/mortgages/.

The average 15-year fixed mortgage held at 4.29 percent, while the larger jumbo 30-year fixed rate fell for the third week in a row to 5.51 percent. Adjustable rate mortgages were mostly lower, with the average 5-year ARM dipping to 3.86 percent and the 7-year ARM falling to 4.19 percent.

Fixed mortgage rates have shown very little movement over the past month and are essentially unchanged since the first of the year. But the disparity between fixed and adjustable rates has grown significantly in the last six months, with fixed rates having moved higher while adjustable rates moved lower. Some of the hybrid adjustable rate products, like the 5/1 ARM and the 7/1 ARM, now represent compelling value for borrowers that have ample equity and don’t expect to be in the house more than a handful of years or so. But this strategy isn’t without risk, as the rates will eventually begin annual adjustments. The inability to sell the home, or a change in circumstances, could throw a wrench into those plans. But a homeowner moving on before the first adjustment enjoys a low fixed rate without the worry of upward movements.

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 4.95 percent, the monthly payment for the same size loan would be $1,067.54, a savings of $174 per month for a homeowner refinancing now.

SURVEY RESULTS 30-year fixed: 4.95% — up from 4.94% last week (avg. points: 0.40)
15-year fixed: 4.29% — unchanged from last week (avg. points: 0.37)
5/1 ARM: 3.86% — down from 3.88% last week (avg. points: 0.40)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.

For a full analysis of this week’s move in mortgage rates, go to http://www.bankrate.com/finance/mortgages/mortgage-rates-remain-attractively-low.aspx?ic_id=tsThumb1.

The survey is complemented by Bankrate’s weekly Rate Trend Index, in which a panel of mortgage experts predicts which way the rates are headed over the next seven days. The majority of panelists – 61 percent – don’t expect much movement at all in mortgage rates, saying they’ll be more or less unchanged over the next week. A little more than one-in-four, 28 percent, predicts an increase in mortgage rates, while just 11 percent forecast a decline over the next seven days.

For the full mortgage Rate Trend Index, go to http://www.bankrate.com/RTI.

About Bankrate, Inc.

The Bankrate network of companies includes Bankrate.com, Interest.com, Mortgage-calc.com, Nationwide Card Services, Savingforcollege.com, Fee Disclosure, InsureMe, CreditCardGuide.com, Bankaholic, CreditCards.com and NetQuote. Each of these businesses helps consumers to make informed decisions about their personal finance matters. The company’s flagship brand, Bankrate.com is a destination site of personal finance channels, including banking, investing, taxes, debt management and college finance. Bankrate.com is the leading aggregator of rates and other information on more than 300 financial products, including mortgages, credit cards, new and used auto loans, money market accounts and CDs, checking and ATM fees, home equity loans and online banking fees. Bankrate.com reviews more than 4,800 financial institutions in 575 markets in 50 states. Bankrate.com provides financial applications and information to a network of more than 75 partners, including Yahoo! (Nasdaq: YHOO), America Online (NYSE: AOL), The Wall Street Journal and The New York Times (NYSE: NYT). Bankrate.com’s information is also distributed through more than 500 newspapers. Bankrate, Inc. was acquired by Apax Partners, one of the world’s leading private equity investment groups, in September 2009. Apax operates across the United States, Europe and Asia and has more than 30 years of investing experience. For more information on Apax, visit: www.Apax.com.