Washington, D.C. – The Federal Housing Finance Agency today reported that the average interest rate on conventional 30-year, fixed-rate, mortgage loans of $417,000 or less increased 1 basis point to 4.88 percent in May. The average interest rate on 15-year, fixed-rate loans of $417,000 or less decreased 4 basis points to 4.71 percent in May. These rates are calculated from the FHFA’s Monthly Interest Rate Survey (MIRS) of purchase-money mortgages. These results reflect loans closed during the May 22–31 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-April.

The contract rate on the composite of all mortgage loans (fixed- and adjustable-rate) was 4.87 percent in May down 1 basis point from 4.88 percent in April. The effective interest rate, which reflects the amortization of initial fees and charges, was 4.95 percent in May down 1 basis point from 4.96 percent in April.

This report contains no data on adjustable-rate mortgages due to insufficient sample size.

Initial fees and charges were 0.58 percent of the loan balance in May, up 0.01 percent from 0.57 in April. Forty-four percent of the purchase-money mortgage loans originated in May were "no-point" mortgages, up from forty-five percent in April. The average term was 28.3 years in May, unchanged from April. The average loan-to-price ratio in May was 74.2 percent, down from 75.1 percent in April. The average loan amount increased by $4,200 to $221,200 in May.

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 4.88 percent based on loans closed in May. This is unchanged from the previous month. This Contract rate series can be found at www.fhfa.gov/DataTools/Downloads/Pages/Monthly-Interest-Rate-Data.aspx.

Source: FHFA

The MIRS was previously released by the Federal Housing Finance Board (FHFB). 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 June index value will be announced on July 28, 2009.

Technical note: The data is 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 excludes FHA-insured and VA-guaranteed mortgages, refinancing loans, and balloon loans. This month’s data is based on 8,619 reported loans from 45 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 is 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.