Mortgage rates retreated, with the average conforming 30-year fixed mortgage rate falling to 5.12 percent, according to Bankrate.com's weekly national survey. The average 30-year fixed mortgage has an average of 0.47 discount and origination points.

The average 15-year fixed mortgage stepped down to 4.49 percent while the larger jumbo 30-year fixed rate nosed higher to 5.94 percent. Adjustable rate mortgages were mostly lower, with the average 3-year ARM backpedalling to 4.52 percent while the 5-year ARM sank to 4.31 percent.

European debt worries were the catalyst for this week's decline in mortgage rates. The idea that countries an ocean away having trouble repaying their debts could translate into lower mortgage rates here probably sounds pretty Greek to most people. But when investors get nervous, like they are now, they gravitate to safer investments. Those safer investments are securities issued by the U.S. government, to which mortgage rates are closely related. Whenever the nervousness subsides, mortgage rates will move back up.

The last time mortgage rates were above 6 percent was Nov. 2008. At that time, the average rate was 6.33 percent, meaning a $200,000 loan would have carried a monthly payment of $1,241.86. With the average rate now 5.12 percent, the monthly payment for the same size loan would be $1,088.36, a savings of $153 per month for a homeowner refinancing now.

SURVEY RESULTS

30-year fixed: 5.12% - down from 5.21% last week (avg. points: 0.47)

15-year fixed: 4.49% - down from 4.54% last week (avg. points: 0.44)

5/1 ARM: 4.31% - down from 4.37% last week (avg. points: 0.38)