The average rate on the benchmark 30-year fixed-rate mortgage (FRM) increased to its highest point since last October, rising to 4.29 percent, according to Bankrate.com's weekly national survey. The average 30-year FRM has an average of 0.42 discount and origination points. The average 15-year FRM jumped to 3.48 percent, while the jumbo 30-year FRM soared to a five-month high of 4.85 percent. Adjustable-rate mortgages (ARMs) were higher across the board, with the average five-year ARM climbing to 3.24 percent and the seven-year adjustable hitting the 3.43 percent mark.
More good news on the U.S. economy and a decreasing likelihood of further Fed bond-buying stimulus had bond investors headed for the exits over the past week, pushing mortgage rates to the highest level in five months. Mortgage rates are closely related to yields on long-term government bonds. Despite the sudden increase, mortgage rates are still at extremely attractive levels, not only for homebuyers but for the legions of homeowners now eligible to refinance through the revised Home Affordable Refinancing Program (HARP) 2.0. But an improving economy was bound to bring rates up from the record-low levels we've enjoyed in recent months.
The last time mortgage rates were above the six percent mark was November of 2008. At the time, the average 30-year FRM was 6.33 percent, meaning a $200,000 loan would have carried a monthly payment of $1,241.86. With the average rate now 4.29 percent, the monthly payment for the same size loan would be $988.57, a difference of $253 per month for anyone refinancing now.
Bankrate.com survey results
►30-year FRM: 4.29 percent—up from 4.15 percent from last week (avg. points: 0.42)
►15-year FRM: 3.48 percent—up from 3.38 percent last week (avg. points: 0.32)
►5/1 ARM: 3.24 percent—up from 3.14 percent last week (avg. points: 0.40)