Rates on 30-Year Mortgages Fall to Average 5.16%

Rates on 30-year-fixed mortgages fell this week, offering homeowners a chance to refinance their loans, Freddie Mac said Thursday.

The average rate on a 30-year fixed mortgage dropped to 5.16 percent this week from 5.25 percent last week. A year ago, the 30-year, fixed-rate mortgage averaged 5.72 percent.

Frank Nothaft, Freddie Mac's chief economist, said interest rates for 30-year fixed-rate mortgages are almost 1.5 percentage points below last year's peak set in late July, "offering many homeowners an incentive to refinance."

The new rate translates into a monthly payment savings of about $188 on a $200,000 loan, Nothaft said.

Average rates for 30-year-fixed mortgages had been rising since hitting a record low of 4.96 percent a month ago, a decline attributed to the Federal Reserve's move to buy $500 billion in mortgage-backed securities to spur lending by banks.

In late January, Freddie Mac reported that U.S. homeowners took out $17.5 billion in home equity in the fourth quarter by refinancing their mortgages, the lowest amount since the first quarter of 2001.

The average rate this week on a 15-year fixed-rate mortgage was 4.81 percent, Freddie Mac said, down from 4.92 percent last week and 5.25 percent a year ago.

Average rates on five-year, adjustable-rate mortgages fell slightly to 5.23 percent from 5.26 percent. Rates on one-year, adjustable-rate mortgages rose slightly to 4.94 percent from 4.92 percent last week.

The rates do not include add-on fees known as points. The nationwide fee for 30-year and 15-year mortgages averaged 0.7 point for this week. Fees for five-year adjustable rate mortgages averaged sixth-tenths of a point, and 0.5 point for one-year adjustable rate mortgages.

Freddie Mac and sibling company Fannie Mae own or guarantee about half of the $11.5 trillion in U.S. outstanding home loan debt. The government seized control of the companies in September.

Contact Real Estate


    Get the best of CNBC in your inbox

    To learn more about how we use your information,
    please read our Privacy Policy.
    › Learn More
  • Diana Olick serves as CNBC's real estate correspondent as well as the editor of the Realty Check section on CNBC.com.

Latest Special Reports