US Mortgage rates fall to a decade low

October 7th, 2010 - 11:45 pm ICT by Aishwarya Bhatt  

Mortgage rates on 30-year mortgages fell to 4.27 percent, the lowest in a decade. This is the ninth time that the rate has fallen in 3 months. The rates were pushed down by traders, who believe that the Federal Reserve is going to inject more money into the American slowing economy.

The mortgage rate dropped from last week’s rate of 4.32 percent for 30-year fixed mortgages and the value is the lowest on record since 1971.

15-year fixed mortgage rates also dropped to 3.72 from 3.75 percent and that value is also the lowest since 1991. The 15-year fixed loan is the popular choice for refinancing.

Mortgage rates tend to follow the trend of investor yields and it is believed that most investors are pushing their money into Treasury bonds, which provides security for their money. However those bonds yield lower returns.

In the beginning of April this year, the 30-year mortgage rate was 5.08 percent with the 15-year mortgage rate going for 4.39 percent.

Mortgage buyer, Freddie Mac calculates average mortgage rate by collecting rates from leading mortgage companies in the United States from Monday to Wednesday every week.

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