Mortgage Rates: Adjustable Mortgage Rate Survey Results

Freddie Mac released their 26th annual adjustable mortgage rate survey this afternoon. The mortgage survey showed that mortgage lenders who offer adjustable rate mortgages find hybrid adjustable rate mortgages far more popular with borrowers than annually adjusting adjustable rate mortgages.

The most popular of adjustable mortgage rates is the 5/1 ARM, more than 80% of lenders quoted 5/1 mortgage rates. The report also shows the popularity of ARMs increases when mortgage rates are high like they were in the late 1970’s and early 1980’s.

Looking for today’s mortgage interest rates? Use our mortgage rate tables to find current mortgage rates  in your state or zip code. Today’s Mortgage Interest Rates.

Following is the Adjustable Rate Mortgage Survey:

Fixed-rate lending has dominated the home mortgage market over the past year because of the 50-year low in interest rates for this product and the comfort that a fixed principal-and-interest payment assures the consumer,” said Frank Nothaft, Freddie Mac vice president and chief economist. “While ARM lending has been limited, those consumers who prefer an ARM generally have many lenders and products to choose from. The most offered product in the survey was the 5/1 ARM, where more than four out of five ARM lenders quoted rates. The 5/1 hybrid has a fixed rate for five years and then adjusts annually afterwards.”

ARMs originally became popular during the late 1970s and early 1980s when inflation and long-term interest rates were high. In 1984, the ARM share of home purchase loans topped 62 percent, according to the Federal Housing Finance Agency. Recently, however, overall inflation and interest rates on fixed-rate loans have been very low. In 2009, the ARM share of purchase-money conventional loans averaged just 3 percent and was the smallest annual share since 1982 when the series began.

Traditionally, the 1-year ARM, which adjusts every year, dominated the ARM market. As early as 1997, all ARM lenders offered a conforming 1-year ARM. Yet in 2009, only 23 percent of ARM lenders offered this product (up slightly from 21 percent in 2008). In addition, lenders offering a similar jumbo ARM (loan amounts that exceed Freddie Mac’s statutory loan limits) fell from 35 percent in 2008 to 23 percent in 2009, and just a couple of lenders quoted a 1-year ARM with FHA insurance; only 1 percent of FHA loans issued were ARMs during its fiscal year ending September 30, 2009.

After the 5/1 hybrid, the next most commonly found product in the ARM market was the 3/1 hybrid, which was offered by three out of five lenders. Another 3-year option is the 3/3 ARM, which adjusts every third year and is indexed to the 3-year Treasury yield, but only 7 percent of lenders offered it.

Longer-term hybrid products, such as the 7/1 and 10/1 ARMs, were also available from lenders, consisting of 55 percent and 24 percent of the survey participants, respectively. Because of the long initial fixed-rate period (7 or 10 years), the initial interest rates were priced close to or slightly above the rate on a 30-year fixed-rate loan. In general, the initial interest rate rises with the length of the initial fixed-period across the array of hybrid ARM products.

Today’s Mortgage Interest Rates

Conforming 30 year mortgage rates at 5.06 percent this week, down from the previous week’s average home mortgage rate of 5.17 percent.

Conforming 15 year mortgage rates are at 4.44 percent this week, down from last week’s average home loan interest rate of  4.55 percent.

Jumbo Mortgage Rates

30-year jumbo mortgage rates are averaging 5.72% this week, down from the prior week’s loan home rate of 5.85%.

15 year jumbo mortgage loans are averaging 5.16% this week, down from the prior week’s average mortgage home loan rate of 5.33%.

Adjustable Mortgage Rates

Conforming 1 year adjustable home mortgage loan rates are averaging at 4.50% this week, down from the prior week when one year home loans were averaging 4.57%.

Conforming 3 year adjustable mortgage interest rates are averaging 4.53%, down from last week’s average loan rate of 4.56%.

Conforming 5 year adjustable mortgage rates are averaging 4.12% this week, down from the previous week’s average mortgage rate of 4.33%.

Conforming 7 year adjustable loan rates are averaging 4.56%, down considerably from last week’s average loan rate of 4.85%.

Conforming 10-year mortgage rates are at 5.18%, down from the previous week’s average bank mortgage rate of 5.33%.

Jumbo Adjustable Mortgage Rates

Jumbo 1 year jumbo adjustable mortgage rates are averaging 5.48% this week, unchanged from the prior week’s average mortgage finance interest rate.

Jumbo 3-year jumbo ARMs are averaging 5.27% this week, down a lot from last week’s adjustable rate of 5.80%.

Current 5 year jumbo ARM is averaging 4.89% this week, down from the prior week’s average rate on a five year jumbo mortgage 0f 5.07%.

7 year jumbo ARMs are averaging 5.43% this week, down from last week’s average mortgage rate of 5.79%.

The average 10 year jumbo is at 5.95%, down from the prior week’s average 10 year mortgage rate of 6.10%.

Interest Only Mortgage Rates

3 year interest only mortgage rates are averaging 4.65% this week, down from last week’s average interest rate of 4.70%.

5 year interest only loans are averaging 4.21% this week, down from last week’s average five year interest only mortgage rate of 4.49%.

7 year IO loan rates are averaging 4.76% this week, down from last week’s average interest rate of 5.07%.

Jumbo Interest Only Mortgage Rates

3 year jumbo interest only mortgages are averaging 5.42% this week, down from last week’s jumbo interest mortgage rate of 5.95%.

5 year jumbo IO loan rates are averaging 5.24%, down from the prior week’s average IO mortgage rate of 5.40%.

The average jumbo 7 year IO loan mortgage rate is at 5.73%, down from last week’s average jumbo rate of 6.27%.

Home Equity Loans

The average home equity loan rate was up considerably this week over last. 10 year home equity loan rates decreased to 7.424% this week, down from last week’s average equity home loan rate of 7.425%. 15 year home equity rates decreased to 7.520%, down slightly from the prior week’s average equity loan rate of 7.521%.

Home Equity Line of Credit (HELOC)

Average home equity line of credit rates were down slightly this week over last. The average HELOC rate is at 4.904% this week, unchanged from last week’s average HELOC rate.

Looking for current mortgage rates? The best mortgage rates including jumbo rates can be found in your state or zip code by using our bank mortgage rate tables. Today’s Mortgage Interest Rates