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Mortgage Rates Surge

Mortgage interest rates on conventional purchase-money mortgages increased in February from the month prior according to data from the Monthly Interest Survey released by the Federal Housing Finance Agency (FHFA).

The data indicated that the National Average Contract Mortgage Rate for the Purchase of Previously Occupied Homes by Combined Lenders Index was up 16 basis points to 4.28 percent for loans closed in late February from 4.12 percent recorded in January.

The survey provides monthly information on interest rates, loan terms, and house prices by property type, including new and previously occupied homes; by loan type (fixed- or adjustable-rate); and by lender type that includes savings associations, mortgage companies, and commercial and savings banks. It also provides information on 15-year and 30-year fixed-rate loans. The survey found that the average interest rate on all mortgage loans in February was 4.24 percent, up 14 basis points from 4.10 in January. The average interest rate on conventional, 30-year, fixed-rate mortgages of $453,100 or less was 4.36 percent, up 17 basis points from 4.19 in January.

The effective interest rate on all mortgage loans was 4.34 percent in February, up 18 basis points from 4.16 in January, the data indicated. The effective interest rate accounts for the addition of initial fees and charges over the life of the mortgage.

The survey found that borrowers were also taking larger loans in February with the average loan amount for all loans rising $13,500 to $311,900 in February, from $298,400 in January.

While the indices include data for 15-year mortgages and adjustable-rate mortgages, they do not include mortgages guaranteed or insured by either the FHFA or the U.S. Department of Veterans Affairs. The indices also exclude refinancing loans and balloon loans.  

About Author: Radhika Ojha

Radhika Ojha is an independent writer and editor. A former Online Editor and currently a reporter for MReport, she is a graduate of the University of Pune, India, where she received her B.A. in Commerce with a concentration in Accounting and Marketing and an M.A. in Mass Communication. Upon completion of her master’s degree, Ojha worked at a national English daily publication in India (The Indian Express) where she was a staff writer in the cultural and arts features section. Ojha also worked as Principal Correspondent at HT Media Ltd and at Honeywell as an executive in corporate communications. She and her husband currently reside in Houston, Texas.

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