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 5 basis points to 5.10 percent in January. The average interest rate on 15-year, fixed-rate loans of $417,000 remained unchanged at 4.54 percent in January. These rates are calculated from the FHFA’s Monthly Interest Rate Survey (MIRS) of purchase-money mortgages. These results reflect loans closed during the January 25–31 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-December.

The contract rate on the composite of all mortgage loans (fixed- and adjustable-rate) was 4.99 percent in January, up 7 basis points from 4.92 percent in December. The effective interest rate, which reflects the amortization of initial fees and charges, was 5.07 percent in January, up 6 basis points from 5.01 percent in December.

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

Initial fees and charges were 0.54 percent of the loan balance in January, down 0.08 percent from 0.62 in December. Fifty-one percent of the purchase-money mortgage loans originated in January were "no-point" mortgages, up from 45 percent in December. The average term was 27.8 years in January, up 0.4 years from 27.4 years in December. The average loan-to-price ratio in January was 72.7 percent, down 1.2 percent from 73.9 percent in December. The average loan amount was $218,000 in January, up $200 from $217,800 in December.

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 5.01 percent based on loans closed in January. This is an increase of 0.09 percent 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 February index value will be announced on March 30, 2010.

Technical note: The data are 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 exclude FHA-insured and VA-guaranteed mortgages, refinancing loans, and balloon loans. This month’s data are based on 3,981 reported loans from 39 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 are 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.