VIEWS: 174 PAGES: 2 CATEGORY: The Global Economy POSTED ON: 10/16/2008
Bankrate Reports Mortgage Rates Post Biggest Increase in 21 Years. Mortgage rates soared this week, with the average 30 year fixed mortgage rate jumping more than one-half percentage point to 6.74 percent. According to Bankrate.com's weekly national survey, the average 30-year fixed mortgage has an average of 0.42 discount and origination points.
Bankrate Reports Mortgage Rates Post Biggest Increase in 21 Years Mortgage rates soared this week, with the average 30-year fixed mortgage rate jumping more than one-half percentage point to 6.74 percent. According to Bankrate.com's weekly national survey, the average 30-year fixed mortgage has an average of 0.42 discount and origination points. The average 15-year fixed rate mortgage climbed to 6.40 percent, while the average jumbo 30 -year fixed rate rose to 7.87 percent. Adjustable mortgage rates were sharply higher also, with the average 1 -year ARM now 6.32 percent and the average 5/1 ARM skyrocketing to 6.61 percent. Mortgage rates posted the biggest one week increase since April 1987, soaring as credit fears reached a fever pitch. In addition, yields on benchmark 10-year Treasury notes climbed as investors worried about the additional supply of government debt resulting from billions of dollars in various rescue packages. Mortgage rates move in relation to Treasury yields, but at a spread -- or markup -- over the risk-free government debt. The intensifying credit crunch and the government guarantees on bank debt drove up the spread between mortgage bonds and benchmark Treasuries. But since Treasury yields climbed from 3.5 percent to over 4 percent over the previous week, mortgage borrowers had two factors working against them. This sharp increase in mortgage rates over the past week has a direct impact on a homebuyer's affordability. At last week's rate of 6.20 percent, a $200,000 loan carried a monthly payment of $1,224.94. This week, with the average rate at 6.74 percent, the monthly payment on a $200,000 loan is $1,295.87. SURVEY RESULTS 30-year fixed: 6.74% -- up from 6.20% last week (avg. points: 0.42) 15-year fixed: 6.40% -- up from 5.95% last week (avg. points: 0.60) 5/1 ARM: 6.61% -- up from 6.21% last week (avg. points: 0.40) 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. More than half of respondents, 53 percent, expect rates to pull back in the coming weeks. Meanwhile, 27 percent predict a further increase in mortgage rates, and the remaining 20 percent forecast that mortgage rates will remain more or less 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. (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 4,800 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.
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