Interest Rate Roundup Nov. 20, 2008

  • Mortgage rates, loan activity continue downward.
  • Banks competing for deposit money offer above-average yields.
  • Auto loan rates plummet.

Here's a look at the state of interest rates on five common consumer banking products and the latest rates from's weekly national survey of large banks and thrifts conducted Nov. 19, 2008.


Rate: 6.33 percent (30-year fixed) Average Points: 0.37

Mortgage rates fell this week, with adjustable-rate mortgages dropping especially sharply. 

The average 30-year fixed-rate fell 6 basis points, to 6.33 percent. A basis point is one-hundredth of a percentage point.

The average 15-year fixed -- a popular option for refinancing -- fell 7 basis points, to 6.01 percent. The average jumbo 30-year fixed slid 8 basis points, to 7.62 percent.

Adjustable-rate mortgages fell even more substantially. The one-year adjustable-rate mortgage dropped 16 basis points, to 5.78 percent. The popular 5/1 ARM sank 24 basis points, to 6.18 percent.

Meanwhile, mortgage loan activity declined by a seasonally adjusted 6.2 percent for the week ending Nov. 14, according to the Mortgage Bankers Association.

Refinancing activity fell 2.6 percent from the previous week while applications for new purchase slid 12.6 percent.

The drumbeat of bad housing news continued this week. U.S. home median prices declined by a record 9 percent during the third quarter when compared to the same period in 2007, according to the National Association of Realtors.

Housing starts and permits also fell to new record lows in October, according to the U.S. Commerce Department.

-- Chris Kissell


Yields: 2.56 percent (1-year CD yield); 3.39 percent (5-year CD yield)

The economy is like a swamp that we wandered into on an afternoon hike and now can't find our way out. Night is falling and even the hike's leaders, who seemed so reassuring earlier in the day, are letting on that they don't know what's ahead or how to get out of this mess.

The "mess" for CD money isn't nearly as awful as it is for money you may have sunk in the stock market. Nevertheless, CDs yields are dwindling and aren't compensating you for inflation. For the second week in a row, we're seeing yields cut on the four CDs highlighted in this report.

The average one-year CD yield is 2.56 percent, down 5 basis points. The five-year average dropped 4 basis points to 3.39 percent. The one-year jumbo now averages 2.70 percent, off by 3 basis points and the five-year shed 4 basis points and stands at 3.48 percent. A basis point is one-hundredth of a percentage point.

It's not all gloom and doom. Many banks are competing for your money and are offering deals well above average. Visit Bankrate's high-yield CDs databank to get more return for your money.

Money market accounts aren't faring much better than CDs. The average yield dropped 3 basis points to 0.71 percent.

You can find nearly 30 institutions in Bankrate's high-yield money market and savings account database that are paying at least 3 percent on these FDIC-insured accounts.

-- Laura Bruce

Auto loans

Rates: 7.13 percent (60-month, new car); 7.8 percent (36-month, used car)

Auto loan rates plummeted this week for all loan terms.

Across the board, new car loan rates dropped 9 basis points. Now, the 60-month new-car loan rate is 7.13 percent, the 48-month new-car loan rate is 7.1 percent and the 36-month new-car loan rate is 7.05 percent. A basis point is one-hundredth of a percentage point.

In used cars, the 36-month loan rate is down 10 basis points to 7.8 percent and the 48-month used-car loan rate fell 8 basis points to 7.86 percent.

The debate over a bailout for U.S. automakers is raging on Capitol Hill this week. On Tuesday, executives from GM, Ford and Chrysler made their pitch to the Senate for $25 billion in aid.

On Wednesday, an Associated Press story quoted Banking Committee Chairman Chris Dodd, D-Conn., as calling the possibility of reaching an agreement "remote."

-- Sheyna Steiner

Home equity products

Rates: 5.1 percent (line of credit); 8.09 percent (loan)

Rates on home equity products were split this week.

The average home equity line of credit fell 2 basis points, to 5.1 percent. A basis point is one-hundredth of a percentage point.

Most home equity lines of credit are indexed to the prime rate, a common benchmark for consumer and business loans set by banks. The prime rate moves in lock step with the federal funds rate.

More than a year of regular Federal Reserve cuts in the federal funds rate have sent HELOC rates steadily lower.

Meanwhile, home equity loan rates rose 5 basis points, to 8.09 percent. Loan rates are not directly tied to Federal Reserve rate decisions.

-- Chris Kissell

Credit Cards

Rates: 13.42 percent (standard fixed); 11.50 percent (standard variable)

This week the APRs offered on all types of fixed and variable rate cards remained flat. On standard, gold and platinum cards the average fixed rate sat at 12 percent, and the variable rate at 11.27 percent. The standard-fixed rate average hovered at a 13.42 percent rate, while the variable rate on standard cards slid to 11.50 percent, down from 11.58 percent last week.

Despite the fact that variable rates are declining, some cardholders are finding their rates increasing due to the credit crunch. Both Citigroup and American Express have pledged to raise some cardholders' rates by several percentage points.

-- Leslie McFadden


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