Bankrate: Mortgage Rates Plummet as QE3 Kicks Off
NEW YORK, Sept. 27, 2012 /PRNewswire/ -- The onset of the Federal Reserve's latest stimulus effort brought mortgage rates to fresh lows, with the benchmark 30-year fixed mortgage sinking to 3.55 percent, according to Bankrate.com's weekly national survey. The average 30-year fixed mortgage has an average of 0.39 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 rate pulled back 2.88 percent and the larger jumbo 30-year mortgage plunged to 4.19 percent, both record lows. Adjustable mortgage rates reset record lows also, with the 5-year and 7-year ARMs dropping modestly to 2.68 percent and 2.85 percent, respectively.
With the Fed's efforts focused on buying mortgage-backed bonds, they are aiming squarely at mortgage rates. The hope of the Fed is to juice the economy by reducing mortgage rates further, spurring home purchases and refinancings. The part about reducing interest rates is certainly working and it will no doubt pull forward some home purchases. But there is plenty of skepticism about whether this will be enough to jumpstart the sluggish economy.
The last time mortgage rates were above 6 percent was Nov. 2008. At the time, the average 30-year fixed 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 3.55 percent, the monthly payment for the same size loan would be $903.68, a difference of $338 per month for anyone refinancing now.
30-year fixed: 3.55% -- down from 3.7% last week (avg. points: 0.39)
15-year fixed: 2.88% -- down from 2.95% last week (avg. points: 0.29)
5/1 ARM: 2.68% -- down from 2.69% last week (avg. points: 0.42)
Bankrate (RATE)'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.
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. Half of the panelists forecast further declines, while 43 percent predict mortgage rates will remain more or less unchanged in the next week. Just 7 percent foresee an increase in mortgage rates over the coming week.
For the full mortgage Rate Trend Index, go to http://www.bankrate.com/RTI.
About Bankrate, Inc. (NYSE: RATE)
The Bankrate network of companies includes Bankrate.com, Interest.com, Mortgage-calc.com, Nationwide Card Services, 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. Bankrate.com's information is also distributed through more than 500 newspapers.
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SOURCE Bankrate, Inc.