Washington, D.C. – The Federal Housing Finance Agency (FHFA) 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 adjustable-rate mortgage (ARM) contracts, was 3.36 percent based on loans closed in November. There was a decrease of 0.08 from the previous month. With data for February 2012, FHFA began calculating interest rates using un-weighted survey data. The complete contract rate series can be found at www.fhfa.gov/DataTools/Downloads/Pages/Monthly-Interest-Rate-Data.aspx.

Source: FHFA

The average interest rate on conventional, 30-year, fixed-rate mortgage loans of $417,000 or less decreased 4 basis points to 3.54 in November. These rates are calculated from the FHFA’s Monthly Interest Rate Survey of purchase-money mortgages (see technical note). These results reflect loans closed during the November 26–30 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-October.

The contract rate on the composite of all mortgage loans (fixed- and adjustable-rate) was 3.36 percent in November, down 8 basis points from 3.44 percent in October. The effective interest rate, which reflects the amortization of initial fees and charges, was 3.49 percent in November, down 8 basis points from 3.57 percent in October.

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

Initial fees and charges were 1.08 percent of the loan balance in November, up 3 basis points from October. Sixteen percent of the purchase-money mortgage loans originated in November were "no-point" mortgages, down from 21 percent from the share in October. The average term was 27.4 years in November, down 0.1 years from October. The average loan-to-price ratio in November was 75.7 percent, down 0.1 percent from 75.8 percent in October. The average loan amount was $272,300 in November up $14,900 from $257,400 in October.

Recorded information on this index is available by calling (202) 649-3993. For technical questions on this index, please call David Roderer at (202) 649-3206. The December index value will be announced on Jan. 29, 2013.

Technical note: The data are based on a small monthly survey of mortgage lenders which may not be representative. Survey respondents are asked to report the terms and conditions on all conventional, single-family, fully amortized, purchase-money loans closed during the last five working days of the month. The sample is not a statistical sample but is rather a convenience sample. The data exclude FHA-insured and VA-guaranteed mortgages, refinancing loans, and balloon loans. This month’s data are based on 5,182 reported loans from 29 lenders, which may include 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.