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| 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 1, 2006. |
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Mortgages
Rate: 6.27 percent (30-year fixed) Average
Points: 0.34 
Fixed mortgage rates declined for the second week in a row,
aided by a slower pace of home sales. The average 30-year
fixed-rate mortgage dropped from 6.34 percent to 6.27 percent,
and the average 15-year fixed mortgage rate retreated by a
similar amount, from 5.99 percent to 5.93 percent. The average
jumbo 30-year fixed rate slumped from 6.53 percent to 6.48
percent. Adjustable-rate mortgages declined as well, with
the average 5/1 adjustable mortgage rate sliding from 6.08
percent to 6.02 percent, and the average one-year ARM decreasing
to 5.65 percent from 5.73 percent last week. One week ago,
fixed mortgage rates dropped after investors turned a blind
eye toward inflation concerns, appeasing themselves that core
inflation was not at troublesome levels. This week, the movement
in mortgage rates was dominated by reports on slowing sales
of both new and existing homes. Coupled with rising inventories
of homes available for sale, the cooling housing market has
kept a lid on bond yields and mortgage rates. Mortgage rates
are closely related to yields on long-term government bonds.
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Home
equity products
Rates: 7.67 percent (line of credit);
7.53 percent (loan)
The average home equity loan rate was unchanged at 7.53 percent,
but the average home equity line of credit rate resumed the
upward climb. The average HELOC rate inched higher to 7.67
percent, after pausing at the 7.66 percent mark for an extra
week. HELOC rates have been on a steady and predictable upward
trajectory since the Fed began raising interest rates in June
2004. That journey isn't over yet, as the Fed is expected
to raise rates again at the end of this month, and perhaps
more in coming months. This will propel HELOC rates still
higher, while the jury is still out on what movement will
be seen on fixed-rate home equity loans. Home equity loans
move based on longer-term interest rates rather than the short-term
benchmarks influenced by the Fed. As a result, the increase
in rates has been much more modest for home equity loans.
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Auto
loans
Rates: 7.99 percent (60-month, new-car); 8.72 percent (36-month,
used-car)
Auto loan rates increased again, the fourth consecutive weekly
increase on both new- and used-car loans. The average five-year
new-car loan increased from 7.97 percent to 7.99 percent.
During the second half of 2005, the average five-year new-car
loan rate briefly exceeded 8 percent, getting as high as 8.13
percent in November. The five-year loan is the average length
for a new-car purchase, so this will be the benchmark new-car
loan rate reported. But the movement was the same on shorter-term
new-car loans, with the three-year and four-year terms rising
to 7.88 percent and 7.95 percent, respectively. The average
used-car loan rate increased from 8.7 percent to 8.72 percent,
also the fourth consecutive weekly increase.
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Certificates
of deposit
Yields: 3.48
percent (one-year CD yield); 3.93 percent (five-year CD yield)
Yields on certificates of deposit were higher across the board.
The average six-month CD yield is knocking on the door of
3 percent, rising to 2.98 percent this week. The average six-month
CD yield increased at an equivalent pace. Compared to the
six-month CD, the average one-year CD yield is one-half percentage
point higher at 3.48 percent, up from 3.44 percent one week
ago. On one-year CDs, the pace has quickened slightly in the
first two months of 2006 relative to the final two months
of 2005. Longer-term CDs improved this week, but the improvement
on maturities of three years and longer has been particularly
tame. The average five-year CD yield inched higher from 3.92
percent to 3.93 percent this week, but has not posted any
significant movement in more than three months. This trend
is likely to hold at least through the next Federal Open Market
Committee meeting on March 28, when the Fed is expected to
raise short-term interest rates for a 15th consecutive time.
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Credit
cards
Rates: 12.94 percent (standard fixed);
13.73 percent (standard variable)
Variable credit card rates jumped as issuers try to keep up
with the Federal Reserve's interest rate hikes. The prime rate
that serves as the benchmark for many credit card rates increases
in step with the Fed's increases in short-term interest rates.
This means that following each rate hike, issuers' variable
rate cards have to be repriced in tune with the higher prime
rate. This can take up to three months as issuers reprice on
varied schedules, as illustrated by the increase in variable
rate cards this week. The average standard variable rate climbed
from 13.66 percent to 13.73 percent and the average variable
rate for all classes -- standard, gold and platinum -- increased
from 13.15 percent to 13.21 percent. Even fixed-rate cards showed
some movement this week. The average fixed rate for all classes
of cards is now 11.63 percent, up from 11.58 percent last week.
The average standard-fixed rate was unchanged at 12.94 percent.
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