Interest Rate Roundup

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 Nov. 2, 2005.

Mortgages
Rate: 6.37 percent (30-year fixed) Average Points: 0.33
Mortgage rates soared to a level last seen in May 2004 as economic growth exceeded expectations and the Federal Reserve increased interest rates for the 12th consecutive time. The average 30-year, fixed-rate mortgage increased from 6.24 percent to 6.37 percent. The last time rates were higher was September 2003. The average 15-year, fixed mortgage rate jumped as well, rising from 5.79 percent to 5.91 percent, while the average jumbo 30-year fixed rate climbed to 6.54 percent from 6.41 percent last week. Adjustable-rate mortgages followed suit, with the average 5/1 adjustable-rate mortgage notching higher from 5.82 percent to 5.9 percent, while the average one-year ARM bounded higher from 5.21 percent to 5.35 percent. The spike in fixed mortgage rates could spell trouble for the housing market as buyers lose borrowing power due to higher rates.

Home equity products
Rates: 6.97 percent (line of credit); 7.28 percent (loan)
The bad news now extends to borrowers of both home equity loans and home equity lines. Why? Fed interest-rate hikes continue to push HELOC rates higher, with the average rate rising from 6.94 percent to a four-year high of 6.97 percent. Since the Fed shows no signs of letting up, HELOC rates are poised to go in only one direction for the foreseeable future -- up. Home equity loan rates, which have remained low as long-term interest rates defied the Fed, are now rising too as long-term rates move higher. This week, the average rate increased from 7.24 percent to 7.28 percent, the highest since January 2004. To put into context just how modest the rate movement on home equity loans has been, the average rate has increased only from 6.98 percent to 7.28 percent in the past six months. By contrast, the average HELOC rate has climbed from 6.2 percent to 6.97 percent in the same period of time.

Certificates of deposit
Yields: 3.14 percent (one-year CD yield); 3.77 percent (five-year CD yield)
The average six-month CD yield dipped from 2.7 percent to 2.69 percent. But this was the exception rather than the rule. With the Fed boosting interest rates for a 12th consecutive time and indicating that there are still more to come, CD yields were generally on the rise. The average one-year CD yield is now 3.14 percent, up from 3.09 percent last week and 1.76 percent one year ago. On five-year CDs, the average yield moved up from 3.75 percent to 3.77 percent in the past week but has increased only modestly from 3.49 percent one year ago. Yields are improving, but inflation has been climbing, too. The bottom line to investors is to seek out the best available yields in hopes of staying ahead of inflation.