I'm Lucas Wysocki with your weekly look at mortgage rates. Another week of unease over the fiscal cliff drove mortgage rates lower this week. The average interest rate on a 30-year fixed rate mortgage fell one basis point to 3.53 percent. The 15-year fixed rate mortgage also fell one point to come in at 2.86 percent. And the 30-year jumbo mortgage, generally for loans over $417,000 dropped 5 basis points to 4.01 percent.
On the adjustable side, a 5-year ARM, which offers a fixed interest rate for 5-years which is then adjusted every year thereafter, fell 2 basis points to 2.7 percent.
Low home loan rates might seem great for the consumer, but the catalyst for these drops in interest rates is certainly not. If the looming fiscal cliff is not resolved, Americans are facing the end of payroll tax cuts ad tax cuts from 2001 to 2003, along with new taxes and government spending cuts. If not resolved by the December 31st deadline, the fiscal cliff could put America into a second recession.
If you are shopping for a home, it's important to know how much you can reasonably afford. Bankrate.com has a calculator for that and our search engine will help you find the best rate. I'm Lucas Wysocki.