Federal Housing Finance Agency Reports Mortgage Interest Rates

The average interest rate on conventional, 30-year fixed-rate mortgage loans of $417,000 or less decreased 12 basis points to 4.58 percent in September.

Washington, DC– October 28, 2010 – The Federal Housing Finance Agency today reported that the National Average Contract Mortgage Rate for the Purchase of Previously Occupied Homes by Combined Lenders, used as an index in some ARM contracts, was 4.55 percent based on loans closed in September. This is a decrease of 0.10 percent from the previous month. This Contract Rate series can be found at https://www.fhfa.gov/Default.aspx?Page=251.
The average interest rate on conventional, 30-year fixed-rate mortgage loans of $417,000 or less decreased 12 basis points to 4.58 percent in September. The average interest rate on 15-year, fixed-rate loans of $417,000 increased 11 basis points to 4.57 percent in September. These rates are calculated from the FHFA’s Monthly Interest Rate Survey (MIRS) of purchase-money mortgages. These results reflect loans closed during the Sept. 24-30 period. Typically, the interest rate is determined 30 to 45 days before the loan is closed. Thus, the reported rates depict market conditions prevailing in mid- to late- August.
The contract rate on the composite of all mortgage loans (fixed- and adjustable-rate) was 4.52 percent in September, down 11 basis points from 4.63 percent in August. The effective interest rate, which reflects the amortization of initial fees and charges, was 4.64 percent in September, down 10 basis points from 4.74 percent in August.
This report contains no data on adjustable-rate mortgages due to insufficient sample size.
Initial fees and charges were 0.82 percent of the loan balance in September, up 0.01 percent from 0.81 in August. Twenty-eight percent of the purchase-money mortgage loans originated in September were "no-point" mortgages, up from 31 percent in August. The average term was 27.6 years in September, up 0.1 years from 27.5 years in August. The average loan-to-price ratio in September was 73.3 percent, unchanged from July. The average loan amount was $210,900 in September, down $5,800 from $216,700 in August.
Recorded information on this index is available by calling (202) 408-2940. For technical questions on this index, please call David Roderer at (202) 408-2540. The October index value will be announced on Nov. 23, 2010.

Technical note: The data are based on a monthly survey of major lenders that are asked to report the terms and conditions on all conventional, single-family, fully amortized, purchase-money loans closed the last five working days of the month. The data thus exclude FHA-insured and VA guaranteed mortgages, refinancing loans, and balloon loans. This month’s data are based on 5,176 reported loans from 42 lenders, representing savings associations, mortgage companies, commercial banks, and mutual savings banks. The effective interest rate includes the amortization of initial fees and charges over a 10-year period, which is the historical assumption of the average life of a mortgage loan. The data are weighted to reflect the shares of mortgage lending by lender size and lender type as reported in the latest release of the Federal Reserve Board’s Home Mortgage Disclosure Act data.

The Federal Housing Finance Agency regulates Fannie Mae, Freddie Mac and the 12 Federal Home Loan Banks. These government-sponsored enterprises provide more than 5.9 trillion in funding for the U.S. mortgage markets and financial institutions.


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