Average National Interest Rates Drop 0.07 Percent in February

National data shows interest rates on mortgages decreased in February. Contract mortgage interest rates decreased 0.07 percent from January to February, according to an index of new mortgage contracts. According to the Federal Housing Finance Agency (FHFA), the National Average Contract Mortgage Rate for the Purchase of Previously Occupied Homes by Combined Lenders index was 4.30 percent for loans closed in late February. The index is calculated using FHFA’s Monthly Interest Rate Survey. The contract rate on the composite of all mortgage loans was 4.22 percent, down 14 basis points from 4.36 in January. Interest rates are typically locked in 30-45 days before a loan is closed. Consequently, February data reflects market rates from mid-to-late January. The effective interest rate was 4.38 percent, down 14 basis points from 4.52 percent in January. The effective interest rate accounts for the addition of initial fees and charges over the life of the mortgage. FHFA’s interest rate survey shows the average interest rate on conventional, 30-year, fixed-rate mortgages of $417,000 or less was 4.45 in February, a decrease of 22 basis points. The average loan amount for all loans was $275,700 in February down $8,700 from $284,400 in January.