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Bankrate: Mortgage Rates Soar Ahead of Fed Meeting
New York, New York, USA, 29 June 2006 -- /PRNewswire/ -- Fixed mortgage rates increased for the third consecutive week as higher interest rate expectations take hold. The average 30-year fixed rate mortgage jumped from 6.83% to 6.93%, the highest since 17 April 2002, according to Bankrate.com's weekly national survey of large lenders. The 30-year fixed rate mortgages in this week's survey had an average of 0.34 discount and origination points.

The average 15-year fixed rate mortgage, popular for refinancing, rose to 6.57%. On larger loans, the average jumbo 30-year fixed rate has cleared the 7% threshold by a healthy margin, climbing to 7.11%. Adjustable rate mortgages were also on the move. The average 5/1 adjustable rate mortgage rocketed to 6.59%, and the average one-year ARM increased from 6% to 6.09%.

Mortgage rates were largely unchanged from late April to mid-June. But the past three weeks have seen fixed mortgage rates rise nearly one-quarter percentage point. Typically, interest rate moves by the Federal Open Market Committee don't have a direct impact on fixed mortgage rates, and that has been the case for much of the past two years. But in recent weeks, fixed mortgage rates have climbed as bond investors come to grips with accelerating inflation and the prospect that the Fed will continue to raise interest rates. Mortgage rates are closely related to yields on long-term government bonds. With the yield on 10-year Treasury notes, the benchmark for fixed mortgage rates, roughly equal to what the fed funds rate will be following the Fed's meeting, further rate hikes may mean more of the same for mortgage rates.

Fixed mortgage rates have moved up notably in the first half of this year. As 2005 came to a close, the average 30-year fixed mortgage rate was 6.28%, meaning that the monthly payment on a loan of USD 165,000 was USD 1,019.16. With the average 30-year fixed rate now 6.93%, the same loan originated today would carry a payment of $1,090.00. Despite recent increases, fixed mortgage rates remain an attractive refinancing alternative for adjustable rate borrowers facing sharp payment adjustments.


30-year fixed: 6.93% -- up from 6.83% last week (avg. points: 0.34)
15-year fixed: 6.57% -- up from 6.45% last week (avg. points: 0.31)
5/1 ARM: 6.59% -- up from 6.49% last week (avg. points: 0.3)

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, the majority of respondents, 63%, predict mortgage rates will rise further in the next 30 to 45 days. Of the remainder, 25 percent forecast a retreat in mortgage rates while just 12% think rates will remain unchanged.

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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