Rate Roundup: March 28, 2003

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Weekly rate roundup
By Greg McBride, CFA • Bankrate.com

Here's a look at the state of interest rates on five common consumer banking products and the latest rates from Bankrate.com's weekly national survey of large banks and thrifts conducted March 26, 2003.

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Mortgages

Rate: 5.95 percent (30-year fixed)
Mortgage rates climbed for a second consecutive week, though at a more moderate pace than last week. The benchmark 30-year fixed mortgage reached 5.95 percent, the highest point since Feb. 5, up from 5.92 percent. The 15-year fixed mortgage popular for refinancing also inched higher, rising from 5.25 percent to 5.27 percent, and the one-year adjustable rate mortgage edged up to 4.14 percent from 4.11 percent. The more subdued rise in mortgage rates owes to the wait-and-see mode in financial markets. Mortgage rates are closely tied to yields on long-term Treasury notes, which will fluctuate as reports from the battlefield influence investor sentiment.

Certificates of deposit

Rate: 1.31 percent (1-year CD yield)
Certificates of deposit

Deposit yields continue a prolonged decline, repeatedly reaching new lows. Despite initial optimism about the war effort culminating quickly, uncertainty has begun to creep back into financial markets with the reality that the war will be measured in weeks, not days. This uncertainty, along with the struggling economy, will keep speculation high that further Fed action may be necessary. Deposit yields will remain in the cellar with such sentiment prevailing.

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Auto loans

Rates: 7.67 percent (48-month, new car); 8.66 percent (36-month, used car)
New- and used-car loans alike showed notable declines since last week. The average 3-year used car loan fell from 8.74 percent to 8.66 percent. New-car loans for 3-year, 4-year, and 5-year terms fell nearly in concert, to 7.63 percent, 7.67 percent, and 7.74 percent, respectively. While auto loan rates are also at historic lows, the rates may still appear unattractive relative to other options, such as home equity loans. Fortunately, credit unions also offer very competitive rates for new- and used-auto loans, averaging 6.59 percent and 6.71 percent, respectively.

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Home equity products

Rates: 4.77 percent (line of credit); 7.57 percent (loan)

Rates on home equity lines of credit (HELOCs) declined for the first time in nearly two months, dropping 2 basis points to 4.77 percent. This is the lowest since the week of Feb. 5, and represents the lowest point since Bankrate began surveying the product in 1992. Meanwhile, home equity loans inched 1 basis point higher to 7.57 percent, a modest reversal from the consistent declines registered since January. A basis point is one one-hundredth of one percentage point

Credit cards

Rates: 13.81 percent (standard fixed); 13.23 percent (standard variable)
Credit card rates were virtually unchanged since one week ago, with the standard fixed and platinum fixed averages both inching slightly higher due to a change in the survey group of institutions. The average standard fixed rate card is 13.81 percent, and the average platinum fixed rate card is now 13.26 percent. With credit card delinquencies again on the rise, credit card rates may also rise if issuers opt to protect themselves via increased margins. Cardholders with the best credit are in the best position to command the best rates, as they present a lower risk of delinquency and default to issuers.

-- Posted: March 28, 2003

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