The post-meeting statement issued by the Federal Open Market Committee on Wednesday indicates a desire to keep borrowing rates - especially mortgage rates - low, and a willingness to take additional measures if necessary to accomplish that goal. Specifically, the Fed indicated they could increase the amount of mortgage bond purchases they're making, extend the period of time for these purchases beyond the middle of 2009, and begin buying long-term government debt. All would have the express goal of keeping borrowing rates for consumers and businesses at low levels, as well as increasing the availability of credit to those borrowers.
Lower mortgage rates have opened the door to refinancing for homeowners with equity. Just three months ago, the average 30-year fixed mortgage rate was 6.77 percent, meaning a $200,000 loan would have carried a monthly payment of $1,299.86. With the average rate having since fallen to 5.48 percent, the monthly payment on a $200,000 loan is now $1,133.07.
SURVEY RESULTS
30-year fixed: 5.48% - down from 5.59% last week (avg. points: 0.29)
15-year fixed: 5.10% - down from 5.20% last week (avg. points: 0.37)
5/1 ARM: 5.41% - down from 5.58% last week (avg. points: 0.42)
