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Technical Side
Bankrate: Mortgage Rates Dip Again
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New York, New York, USA, 28 August 2008 -- /PRNewswire/ -- Mortgage rates were lower for the second week in a row, with the average conforming 30-year fixed mortgage rate falling to 6.60%. According to Bankrate.com's weekly national survey of large lenders, the average 30-year fixed mortgage has an average of 0.39 discount and origination points.

The average 15-year fixed rate mortgage popular for refinancing dropped to 6.14%, while the average jumbo 30-year fixed rate is now 7.61%. Adjustable mortgage rates were mostly higher, with the average 1-year ARM rising to 6.28% and the average 5/1 ARM inching up to 6.27%.

The ongoing credit crunch continues to impact all borrowers through higher rates. With the spread between benchmark Treasury yields and rates on fixed mortgages at the highest levels in 22 years, borrowers are seeing rates that are one full percentage point higher than normal. From 1985 until the onset of the credit crunch one year ago, the average difference between fixed mortgage rates and yields on 10-year Treasury notes was 1.64 percentage points. Today, that difference is 2.8 percentage points. The higher borrowing costs reflect the perceived risk investors wish to be compensated for as well as additional fees layered on by Fannie Mae and Freddie Mac.

Although mortgage rates have been relatively calm in recent weeks, it has been a wild ride for much of 2008. Seven months ago, the average 30-year fixed mortgage rate was 5.88%, meaning that a USD 200,000 loan would have carried a monthly payment of USD 1,183.71. But at today's rate of 6.6%, a USD 200,000 loan would mean a monthly payment of USD 1,277.32.

Survey Results:
  • 30-year fixed: 6.60% -- down from 6.66% last week (avg. points: 0.39)
  • 15-year fixed: 6.14% -- down from 6.18% last week (avg. points: 0.42)
  • 5/1 ARM: 6.27% -- up from 6.26% last week (avg. points: 0.45)

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/mortgagerates

The survey is complemented by Bankrate's weekly forward-looking Rate Trend Index, in which a panel of mortgage experts predicts which way the rates are headed over the next 30 to 45 days. No consensus exists, with 36% expecting mortgage rates to rise and 36% predicting rates will remain more or less unchanged in the next 30 to 45 days. The remaining 28% forecast a decline in mortgage rates.

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

About Bankrate, Inc. (NASDAQ:RATE)

The Bankrate network of companies includes Bankrate.com, Interest.com, Mortgage-calc.com, Nationwide Card Services, Savingforcollege.com, Fee Disclosure, and InsureMe. 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 4800 financial institutions in 575 markets in 50 states. In 2007, Bankrate.com had nearly 60 million unique visitors. Bankrate.com provides financial applications and information to a network of more than 75 partners, including Yahoo! (NASDAQ:YHOO), America Online (NYSE:TWX), The Wall Street Journal and The New York Times (NYSE:NYT). Bankrate.com's information is also distributed through more than 500 newspapers.

Source: Bankrate, Inc.


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