Bankrate: Mortgage Rates Hit a 9-Month High

NEW YORK, May 31 /PRNewswire-FirstCall/ -- Mortgage rates increased for the fifth consecutive week, with the average 30-year fixed mortgage rate rising to the highest point since August. According to Bankrate.com's weekly national survey of large lenders, the average 30-year fixed mortgage rate is now 6.47 percent and has an average of 0.26 discount and origination points.

The average 15-year fixed rate mortgage, popular for refinancing, increased by a similar amount, to 6.21 percent. With larger loans, the average jumbo 30-year fixed rate climbed to 6.68 percent. On adjustable rate mortgages, the average one-year ARM nudged higher to 6.09 percent while the 5/1 ARM jumped up to 6.37 percent.

Mortgage rates often show short spurts of volatility and prolonged periods of little movement. We've seen both instances play out thus far in 2007. Mortgage rates had been confined to a narrow range of approximately one-third of a percentage point for nearly seven months - including weeks on end with virtually no movement. But they broke out of that range with this week's move, as hopes for a Fed interest rate cut continue to wane. With several prominent economic releases on tap in the coming days, bond traders have sold positions ahead of time, pushing bond yields and mortgage rates upward. Mortgage rates are closely related to yields on long-term government bonds.

Fixed mortgage rates have increased nearly one-third percentage point since mid-March. At the time, the average 30-year fixed mortgage rate dipped to 6.16 percent, meaning that a $165,000 loan would have carried a monthly payment of $1,006.30. With the average 30-year fixed rate now 6.47 percent, the same loan originated today would carry a monthly payment of $1,039.66. Fixed mortgage rates still remain a compelling refinancing alternative for adjustable rate borrowers facing sharp payment adjustments.

                              SURVEY RESULTS

   30-year fixed: 6.47% -- up from 6.42% last week (avg. points: 0.26)
   15-year fixed: 6.21% -- up from 6.15% last week (avg. points: 0.25)
      5/1 ARM: 6.37% -- up from 6.32% last week (avg. points: 0.24)

Bankrate's national weekly mortgage survey is conducted each Wednesday from data provided by the top 10 banks and thrifts in the top 10 markets.

For a full analysis of this week's move in mortgage rates, go to http://www.bankrate.com/mortgagerates

The survey is complemented by Bankrate's weekly forward-looking Rate Trend Index, in which a panel of mortgage experts predicts which way the rates are headed over the next 30 to 45 days. Expect further increases say the panelists, with 58 percent predicting that mortgage rates will rise. Just 16 percent forecast a decline, while 26 percent say rates will remain more or less unchanged in the next 30 to 45 days.

For the full mortgage Rate Trend Index, go to http://www.bankrate.com/RTI About Bankrate, Inc.

Bankrate, Inc. (NASDAQ: RATE) owns and operates Bankrate.com, a leading Internet consumer banking marketplace. Bankrate.com is a destination site of personal finance channels, including banking, investing, taxes, debt management and college finance. It is the leading aggregator of more than 300 financial products, including mortgages, credit cards, new and used auto loans, money market accounts and CDs, checking and ATM fees, home equity loans and online banking fees. Bankrate.com reviews more than 4,800 financial institutions in 575 markets in 50 states. In 2006, Bankrate.com had nearly 53 million unique visitors. Bankrate.com provides financial applications and information to a network of more than 75 partners, including Yahoo! (NASDAQ: YHOO) , America Online (NYSE: TWX) , The Wall Street Journal (NYSE: DJ) and The New York Times (NYSE: NYT) . Bankrate.com's information is also distributed through more than 400 national and state publications. In addition to Bankrate.com, Bankrate, Inc. also owns and operates Bankrate Select, an Internet lead aggregator and MMIS/Interest.com, which publishes mortgage guides and financial rates and information.

  For more information contact:
  Kayleen Keneally
  Director, Corporate Communications
  kkeneally@bankrate.com
  917-368-8677