Long-term Mortgage Rates Decrease to 5.09% in March, Says FHFA

Residential News » Residential Real Estate Edition | By Michael Gerrity | April 27, 2010 11:35 AM ET

According to the Federal Housing Finance Agency's newest mortgage report, the average interest rate on conventional 30-year, fixed-rate, mortgage loans of $417,000 or less decreased 4 basis points to 5.09 percent in March. The average interest rate on 15-year, fixed-rate loans of $417,000 decreased 8 basis points to 4.57 percent in March.

These rates are calculated from the FHFA's Monthly Interest Rate Survey (MIRS) of purchase-money mortgages. These results reflect loans closed during the March 25-31 period. Typically, the interest rate is determined 30 to 45 days before the loan is closed. Thus, the reported rates depict market conditions prevailing in mid- to late-February. The contract rate on the composite of all mortgage loans (fixed- and adjustable-rate) was 4.99 percent in March, down 4 basis points from 5.03 percent in February. The effective interest rate, which reflects the amortization of initial fees and charges, was 5.08 percent in

March, down 4 basis points from 5.12 percent in February. This report contains no data on adjustable-rate mortgages due to insufficient sample size.

Initial fees and charges were 0.61 percent of the loan balance in March, down 0.02 percent from 0.63 in February. Forty-four percent of the purchase-money mortgage loans originated in March were "no-point" mortgages, down from 46 percent in February. The average term was 27.6 years in March, up 0.1 years from 27.5 years in February. The average loan-to-price ratio in March was 74.2 percent, down 0.6 percent from 74.8 percent in February. The average loan amount was $212,600 in March, up $4,000 from $208,600 in February.

The National Average Contract Mortgage Rate for the Purchase of Previously Occupied Homes by Combined Lenders, used as an index in some ARM contracts, was 4.99 percent based on loans closed in March. This is a decrease of 0.06 percent from the previous month.

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