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30-Yr fixed 4.750 % 0.7 to 1
15-Yr fixed 3.750 % 0.7 to 1
5/1 ARM 3.125 % 0.7 to 1
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Borrowers can keep looking forward to low rates, but for how long?

Current mortgage rates are once again at historically low levels. Across several banks in the United States, the benchmark 30-year fixed rate mortgage dipped to just under 4 percent on average. The underlying economic conditions reported in early November have managed to keep mortgage rates low. Operation Twist, the Federal Reserve’s recently announced plan to keep longer-term interest rates at their lowest levels, seems to be working.

The latest Freddie Mac survey of current refinance mortgage rates at several American banks revealed fluctuations between 3.94 percent and 4.10 percent. The low rate situation has not changed too much since the first week in September, a positive sign which indicates that rate stability may become the norm in the months to come.

Thanks to the current conditions, the Annual Percentage Rate (APR) on the average 15-year mortgage is also at a record low. Borrowers seeking to refinance to a 15-year loan term can expect an APR of about 3.7 percent. Home loan applicants interested in refinancing to an Adjustable Rate Mortgage (ARM) will have no problems finding a low APR to fit their financial plans. The mid-week average APR for a 5-year ARM was 2.73 percent, while the APR for a 1-year ARM was around 3.67 percent.

While conventional mortgage rates declined this week, the average APR on most jumbo loan products edged a bit higher. The same situation was observed in home equity loans and home equity lines of credit.

The Fed’s Operation Twist isn’t the only factor keeping current refinance mortgage rates down. The sovereign debt crisis in Europe has been a strong motivator for driving the yield on debt instruments issued by the U.S. Treasury. Mortgage applicants can expect to find a reasonably low APR as the shop for refinance products in the months to come, but as the European situation improves borrowers could expect APRs to be a little higher than the current mortgage rates.

Higher delinquency rates on mortgage payments surprised the government-controlled mortgage colossus Fannie Mae. A report by credit rating bureau TransUnion revealed that the percentage of delinquent borrowers rose from the first time since 2009. The increase in delinquencies was noticed in ten states; particularly in Florida, where 14 percent of homeowners were late on their mortgage payments. Fannie Mae reported a loss of $7.6 billion last quarter. The wide loss has been attributed to low home values, low interest rates, foreclosures, and late mortgage payments.