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Mortgage rates still under 5 percent

Freddie Mac's weekly mortgage interest rate number -- probably the nation's most widely watched gauge of interest rate trends -- is an average of 4.93 percent, the company reported this morning. Home buyers and refinancers really can't ask for much better than that.

Freddie Mac's rate announcement says fixed rates "hover near record lows." Well, not quite. Maybe it's all the Olympics coverage I've been watching lately, with times calibrated in thousandths of a second, but this week's rate average is nearly a quarter of a percentage point above the record low, 4.71 percent, recorded in early December.

Is a 0.22 percentage point difference (between the record and this week's average rate) enough to sway a borrower's decision? It shouldn't be. On a 30-year fixed-rate mortgage, the difference between 4.93 percent and 4.71 percent is $39.94 per month. These are national averages, anyway, and rates vary according to the lender, the borrower's credit standing and the daily fluctuations of the bond markets.

Note that this week's average interest rate called for 0.7 points in prepaid interest. One point equals 1 percent of the loan amount.

So, if you're in the market for a mortgage, congratulations. Your timing is great. If you're feeling nudged to act solely by "record" low rates, turn on the Olympics and watch some genuine records being set.

By Elizabeth Razzi  |  February 18, 2010; 11:59 AM ET
Categories:  Buying , Mortgages , Statistics  
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