The Associated Press
Posted: Thursday, Feb. 12, 2009
McLEAN, Va. Rates on 30-year-fixed mortgages fell this week, offering homeowners a chance to refinance their loans, Freddie Mac said Thursday.
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 30-year-fixed 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 U.S. 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 sai"
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