| North Palm Beach, Fla. -- Nov. 27, 2009 (Bankrate.com) -- Average rates on 5/1 jumbo interest-only ARMs in The United States rose 3 basis points to 4.97 on Friday, according to Bankrate.com's daily Your Best Interest report. A basis point is one-hundredth of a percent. The mortgages in the survey had an average of 0.57 discount and origination points.
A 5/1 jumbo interest-only ARM is a jumbo mortgage with fixed, interest-only payments for the first five years of the loan. After the five years are up, the loan converts to a loan whose payments cover both interest and principal, and which adjusts annually to current interest rates. A jumbo mortgage is a home loan that exceeds a certain amount (the 2007 limit is $417,000 in the continental U.S., and $625,500 in Alaska, Hawaii and the U.S. Virgin Islands). Jumbo mortgages generally have a slightly higher interest rate than smaller (sometimes called "conventional" or "conforming") mortgages. Someone taking out a $435,000.00 5/1 jumbo interest-only ARM at the current national average would pay $2,327.20 a month in interest for the first five years of the loan. After that point, the loan would convert to an adjustable-rate mortgage, with amortized principal and interest payments. The highest rate in the U.S. on a 5/1 jumbo interest-only ARM was found at that charged 8.250 percent. The lowest rate was found at that charged 3.500 percent. Six months ago, the average rate in United States was 5.29 percent. To see all of the results of Bankrate.com's surveys, go to www.bankrate.com. The Your Best Interest report is a daily service of Bankrate.com, a financial news and information service based in North Palm Beach, Fla. Bankrate surveys more than 300 financial products from more than 4,800 institutions in all 50 states. | 
