Fixed mortgage rates are back down to February lows after sharp decline in bond yields and removal of unpopular refinance fee
Plummeting bond yields and the dismissal of an unpopular refinance surcharge drove fixed mortgage rates down to February lows.
According to the latest data released Thursday by Freddie Mac, the 30-year fixed-rate average dropped to 2.78% with an average 0.7 point. (Points are fees paid to a lender equal to 1% of the loan amount. They are in addition to the interest rate.) It was 2.88% a week ago and 3.01% a year ago. The 30-year fixed average has fallen four weeks in a row.
Freddie Mac, a federally chartered mortgage investor, aggregates rates from about 80 lenders nationwide to come up with weekly national averages. It uses rates for high-quality borrowers with high credit scores and large down payments. Because of the criteria, these rates are not available to every borrower.
The survey is based on home purchase mortgages. Rates for refinances may be different.
The 15-year fixed-rate average decreased to 2.12% with an average 0.7 point. It was 2.22% a week ago and 2.54% a year ago. The five-year adjustable-rate average rose to 2.49% with an average 0.4 point. It was 2.47% a week ago and 3.09% a year ago.
"Mortgage rates fell sharply this week to their lowest level in months," said Matthew Speakman, a Zillow economist. "Less than a year after initially announcing it, the organization that governs Fannie Mae and Freddie Mac said last week that they would remove a policy that places an additional 50 basis point fee on mortgages that are being refinanced," he added. "The program was intended to protect mortgage lenders from pandemic-driven losses, but it ultimately made it more expensive for homeowners to refinance their home loan and artificially increased the average mortgage rate. Rates immediately fell sharply on the announcement, a move that was extended later in the week as mounting concerns about the delta...