Mortgage rates dropped to new lows this week, with the average conforming 30-year fixed mortgage rate now 4.5 percent, according to Bankrate.com's weekly national survey. The average 30-year fixed mortgage has an average of 0.35 discount and origination points.

The average 15-year fixed mortgage fell below the 4 percent mark to 3.96 percent, and the larger jumbo 30-year fixed rate dipped to 5.17 percent, both record lows. Adjustable rate mortgages hit new lows also, with the average 5-year ARM sliding to 3.71 percent and the average 7-year ARM sinking to 3.96 percent.

Mortgage rates hit new record lows as the Federal Reserve expressed concerns about the economy and the slowing rate of inflation. The announcement by the Federal Reserve's monetary policy committee indicated the Fed is prepared to take action to reduce long-term interest rates in the coming months. With prospects of additional bond purchase stimulus, investors jumped into Treasuries driving bond yields and mortgage rates lower. Mortgage rates are closely related to yields on long-term government bonds.

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 4.5 percent, the monthly payment for the same size loan would be $1,013.37, a savings of $228 per month for a homeowner refinancing now.

SURVEY RESULTS

30-year fixed: 4.5% - down from 4.54% last week (avg. points: 0.35)

15-year fixed: 3.96% - down from 4.00% last week (avg. points: 0.33)

5/1 ARM: 3.71% - down from 3.78% last week (avg. points: 0.24)