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Reviewed by Joel Ohman
Founder, CFP®

UPDATED: Feb 7, 2013

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The 30-year fixed-rate mortgage stayed consistent this week according to Freddie Mac’s weekly survey.

For the week ending Feb. 7, 2013, the 30-year fixed-rate mortgage (FRM) averaged 3.53 percent with an average 0.8 point, the same as last week. A year ago, the 30-year FRM averaged 3.87 percent.

If a borrower took out a $250,000 mortgage at today’s mortgage loan interest rate of 3.53 percent, his or her monthly payment would be $1,126.80. After 30 years, he or she would pay a total of $405,648.

If a borrower took the same mortgage out one year ago when mortgage loan interest rates were 3.87 percent, they would pay $1,174.88 monthly, for a total cost of $422,956.80 after 30 years. Using the current home loan interest rate rather than last year’s, borrowers would save $17,308.80. 

The 15-year fixed-rate mortgage averaged 2.77 percent with a 0.7 point, down from last week when it averaged 2.81 percent. At this time last year, the 15-year fixed mortgage loan interest rate averaged 3.16 percent.

Len Kiefer, deputy chief economist at Freddie Mac, told that although fixed rates are shifting upwards, the 30-year fixed rate mortgage is not expected to reach past four percent in 2013.

Mortgage applications increased 3.4 percent this week according to the Mortgage Bankers Association’s weekly mortgage application survey.

“This low rate environment is helping with the housing recovery and making it attractive for homeowners looking to refinance or purchase a new home,” Kiefer said.

The 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.63 percent with a 0.6 point this week, a decrease from last week’s rate of 2.70 percent. At this time last year, the 5-year ARM averaged 2.83 percent.

The 1-year Treasury-indexed ARM averaged 2.53 percent with a 0.4 point, down from last week when it averaged 2.59 percent. A year ago, the 1-year ARM averaged 2.78 percent.

“Mortgage rates were either unchanged or lower this week following a mostly positive employment data report for January,” said Frank Nothaft, vice president and chief economist at Freddie Mac in a released statement.

According to Bureau of Labor Statistics reports, the economy gained 157,000 jobs in the month of January. Additionally, the annual benchmark update illustrated that payroll grew by an additional 424,000 jobs between April 2011 and March 2012.

Although most of the employment reports were positive, the unemployment rate increased from 7.8 to 7.9 percent during January. The unemployment rate is still at a historical high.

Kiefer said the high unemployment rates caused “mixed” news for the job front.

“Noisy data makes parsing monthly changes in labor markets difficult. A longer view shows a labor market that is recovering, but at a slow pace,” he said.