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Bankrate: Mortgage Rates Drop on Fewer Inflation Worries
New York, New York, USA, 08 February 2007 -- /PRNewswire/ -- Mortgage rates dropped for the first time in two months, with the average 30-year fixed mortgage rate falling to 6.31%. This more than reverses the previous week's increase. According to Bankrate.com's weekly national survey of large lenders, the 30-year fixed rate mortgages had an average of 0.31 discount and origination points.

The average 15-year fixed rate mortgage popular for refinancing sank to 6.08%. On larger loans, the average jumbo 30-year fixed rate plunged to 6.48%. Adjustable mortgage rates were in on the act too, with the average 5/1 ARM backtracking to 6.17% and the average one-year ARM settling at 6.04%.

Mortgage rates have been on the rise for much of the past two months because of stronger-than-expected economic reports. But this week, it was more good economic news that led mortgage rates to retreat. It began when the Federal Open Market Committee acknowledged improved inflation readings over the past few months at the conclusion of their 31 January meeting. The good news on the inflation front continued with reports on labor costs and the Fed's favored expenditures index also showing improvement. Fewer inflation worries translated to lower bond yields. Mortgage rates are closely related to yields on long-term government bonds.

Fixed mortgage rates are notably lower than last summer when the Fed last raised interest rates. At the time, the average 30-year fixed mortgage rate was 6.93%, and a USD 165,000 loan carried a monthly payment USD $1090. With the average 30-year fixed rate now 6.31%, the same loan originated today would carry a monthly payment of USD 1022.38. Fixed mortgage rates are a compelling refinancing alternative for adjustable rate borrowers facing sharp payment adjustments.


30-year fixed: 6.31% -- down from 6.42% last week (avg. points: 0.31)
15-year fixed: 6.08% -- down from 6.19% last week (avg. points: 0.34)
5/1 ARM: 6.17% -- down from 6.3% last week (avg. points: 0.28)

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. This week, half of the panelists believe mortgage rates will remain relatively unchanged. The other half is evenly split, with 25% forecasting a decline and 25% predicting an increase in the coming 30 to 45 days.

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

About Bankrate, Inc.

Bankrate, Inc. (NASDAQ:RATE) owns and operates Bankrate.com, a leading Internet consumer banking marketplace. Bankrate.com is a destination site of personal finance channels, including banking, investing, taxes, debt management, and college finance. It is the leading aggregator of 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 2005, Bankrate.com had over 46 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 (NYSE:DJ) and The New York Times (NYSE:NYT). Bankrate.com's information is also distributed through more than 400 national and state publications. In addition to Bankrate.com, Bankrate, Inc. also owns and operates FastFind, an internet lead aggregator and MMIS/Interest.com, which publishes mortgage guides and financial rates and information.


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