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 Aug. 16, 2006.
Mortgages Rate: 6.51 percent (30-year fixed) Average
points: 0.33 Mortgage rates fell for the fourth week
in a row and the sixth time in seven weeks. The 30-year fixed
hasn't been this low since the first week of April. Rates
fell for a number of reasons, the chief one being a slowdown
in the inflation rate. Core wholesale prices fell in July,
and core retail prices climbed, but not as much as economists
had expected. The slowing inflation rate contributed to a
drop in bond yields and in mortgage rates. The average 30-year
fixed rate fell to 6.51 percent from 6.57 percent. The average
15-year fixed, which is a popular option for refinancing,
fell 2 basis points to 6.23 percent. A basis point is one-hundredth
of a percentage point. On bigger loans, the average jumbo
30-year fixed fell to 6.77 percent from 6.79 percent. Adjustable-rate
mortgages pointed both directions. The popular 5/1 ARM fell
4 basis points to 6.28 percent, while the one-year ARM rose
1 basis point, to 6.02 percent. Many one-year ARMs are based
on the average yield on one-year Treasuries for the past year,
and they tend to lag behind the ups and downs of today's market.
Home equity products Rates: 8.19 percent (line of credit);
7.92 percent (loan)
Home equity products headed in different directions. The average
home equity line of credit slipped to 8.19 percent, down from
8.22 percent the previous week. Last week's decision by the
Fed to not raise short-term interest rates affected home equity
lines of credit because most of these loans are indexed to
the prime rate. Fixed-rate home equity loans rose 1 basis
point to 7.92 percent.
Auto
loans
Rates: 7.93 percent (60-month, new car); 8.82 percent (36-month,
used car)
If consumers need more encouragement than rebates and zero-percent
down to buy a new car now, the declining interest rates on
car loans could be the tipping point. Car-loan rates went
down across the board this week. The average 60-month new-car
loan rate decreased 5 basis points, to 7.93 percent. The 36-month
and 48-month new-car rates backed down by 4 basis points to
7.82 percent and 7.88 percent, respectively. The average rate
on a 36-month loan for a used car had the biggest decrease,
to 8.82 percent from 8.91 percent.
Certificates
of deposit Yields: 3.84 percent (1-year CD yield);
4.29 percent (5-year CD yield)
As expected, there was little movement in CD yields this past
week following the Fed decision to not raise interest rates.
The one surprise is the six-month CD, which spiked 7 basis
points to a national average of 3.63 percent. The average
one-year CD yield rose by only 1 basis point to 3.84 percent,
while the average five-year yield stayed flat at 4.29 percent.
Jumbos saw similar activity, with the national average for
the six-month jumbo notching a 7-basis-point gain to 4.09
percent. The average yield for the one-year jumbo CD dropped
a basis point to 4.27 percent, as did the yield on the five-year,
which now stands at 4.52 percent.
Credit
cards
Rates: 13.08 percent (standard fixed); 14.74 percent (standard
variable)
Despite the Fed pausing in its rate hikes last week, the credit
card industry continued to tack on 1 basis point to variable-rate
cards. This week the average standard variable rate is at 14.74
percent, up 1 basis point from last week. One basis point is
one-hundredth of 1 percentage point. The variable rate on all
cards -- standard, gold and platinum -- also increased by 1
basis point to 14.06 percent. Fixed-rate cards remain just that:
fixed at the interest rate that has been charged since March.
The standard fixed-rate cards remain at 13.08 percent, and the
average fixed rate on all cards remains at 11.74 percent.
