Average US 30-year mortgage falls to 3.48 per cent

WASHINGTON – Long-term U.S. mortgage rates slid to new lows for the year this week amid market upheaval stoked by Britain’s vote to leave the European Union. Rates are at three-year lows at the height of the spring home buying season.

Mortgage buyer Freddie Mac said Thursday the average 30-year fixed-rate mortgage fell to 3.48 per cent from 3.56 per cent last week. The benchmark rate is down sharply from 4.08 per cent a year ago, and close to its all-time low of 3.31 per cent in November 2012.

The average for the 15-year fixed-rate mortgage declined to 2.78 per cent from 2.83 per cent last week.

Stock prices plunged in the U.S. and worldwide Friday, when results of the shock British vote became known. Investors fled to the relative safety of U.S. Treasury bonds, driving prices up and yields lower. Stocks recovered this week. But uncertainty remains over the effects on the global economy and financial markets of Britain’s decision to leave the 28-country European bloc.

Long-term mortgage rates tend to track the yield on the 10-year Treasury note, which plummeted to 1.52 per cent Wednesday from 1.73 per cent a week earlier. It fell further to 1.48 per cent Thursday morning.

To calculate average mortgage rates, Freddie Mac surveys lenders across the country at the beginning of each week. The average doesn’t include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1 per cent of the loan amount.

The average fee for a 30-year mortgage fell to 0.5 point from 0.6 point last week. The fee for a 15-year loan eased to 0.4 point from 0.5 point.

Rates on adjustable five-year mortgages averaged 2.70 per cent this week, down from 2.74 per cent last week. The fee remained at 0.5 per cent.