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Bankrate: Mortgage Rates Fall to 5-Month Low
New York, New York, USA 24 August 2006 -- /PRNewswire/ -- Mortgage rates declined for the seventh time in the last eight weeks, aided by last week's better-than- expected reading on the Consumer Price Index. The average 30-year fixed rate mortgage fell to 6.48%, the lowest since 29 March. According to Bankrate.com's weekly national survey of large lenders, the 30-year fixed rate mortgages had an average of 0.32 discount and origination points.

The average 15-year fixed rate mortgage, popular for refinancing, dropped by a similar amount to 6.19%. On larger loans, the average jumbo 30-year fixed rate declined to 6.74%. Adjustable rate mortgages also backtracked. The average 5/1 adjustable rate mortgage slid to 6.24%, and the average one-year ARM retreated to 6.00%.

Slower economic growth and the Fed hitting the pause button have helped bring fixed mortgage rates to a five-month low. Although inflation remains a threat, bond investors are confident in the Fed's forecast that inflation will recede as the economy cools. Bond yields and fixed mortgage rates both reflect some concern on the part of investors that the economy will slow too much, causing the Fed to cut rates at a later date. Fixed mortgage rates are closely related to yields on long-term government bonds.

Fixed mortgage rates have fallen nearly one-half of a percentage point since the Fed last hiked rates at the end of June. At the time, the average 30-year fixed mortgage rate was 6.93%, meaning that the monthly payment on a loan of $165,000 was $1090. With the average 30-year fixed rate now 6.48%, the same loan originated today would carry a monthly payment of $1040.74. With the recent pullback, fixed mortgage rates remain an attractive refinancing alternative for adjustable rate borrowers facing sharp payment adjustments.


30-year fixed: 6.48% -- down from 6.51% last week (avg. points: 0.32)
15-year fixed: 6.19% -- down from 6.23% last week (avg. points: 0.27)
5/1 ARM: 6.24% -- down from 6.28% last week (avg. points: 0.29)

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. The panelists are almost fairly split. Just 25 percent expect rates to fall further, with the remaining majority evenly divided between rates rebounding or remaining unchanged in the next 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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