WASHINGTON – Long-term U.S. mortgage rates fell this week to the lowest level since May 2013, driven down by financial tumult in Europe.
Mortgage giant Freddie Mac says the average 30-year fixed rate mortgage fell to 3.41 per cent from 3.48 per cent a week ago. A year ago, the 30-year rate stood at 4.04 per cent. The 15-year mortgage rate dropped to 2.74 per cent, down from 2.78 per cent last week and 3.20 per cent a year ago.
After Britain’s recent vote to leave the European Union, worried investors fled to the safety of U.S. Treasury bonds. Long-term mortgage rates tend to track the yield on 10-year Treasury notes, which fell to 1.37 per cent Wednesday from 1.75 per cent before the Brexit vote.
The 30-year fixed rate is now close to its all-time low of 3.31 per cent in November 2012.
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 remained at 0.5 point this week. The fee for a 15-year loan was unchanged at 0.4 point.
Rates on adjustable five-year mortgages averaged 2.68 per cent this week, down from 2.70 per cent last week. The fee remained at 0.5 per cent.