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 May 31, 2006.
Mortgages Rate: 6.72 percent (30-year fixed) Average
Points: 0.35 Fixed mortgage rates posted a slight increase, with
the average 30-year fixed-rate mortgage rising from 6.69 percent
to 6.72 percent. The average 15-year fixed-rate mortgage popular
for refinancing inched higher to 6.32 percent. On larger loans,
the average jumbo 30-year fixed rate increased to 6.91 percent
from 6.87 percent. Adjustable-rate mortgages were mixed. The
average 5/1 adjustable-rate mortgage rose to 6.29 percent,
and the average one-year ARM dipped to 5.89 percent. Mortgage
rates have seesawed back and forth in recent weeks on news
of a softening housing market and a hawkish inflation stance
by the Fed. While mild economic news gives the Federal Open
Market Committee room to pause at upcoming meetings, brewing
inflation threatens to keep the Fed in the game and raise
interest rates further. Treasury yields and mortgage rates
react to either possibility, moving up and down with the day's
news.
Home
equity products Rates: 8.01 percent (line of credit);
7.75 percent (loan)
The average rate on a home equity loan -- a fixed rate product
-- increased from 7.69 percent to 7.75 percent, a change driven
largely by a rate correction. The average home equity line
of credit was steady at 8.01 percent. Next week promises to
deliver more volatility as many lenders use the first week
of the month to institute rate changes on home equity loans
and lines of credit. This survey was conducted on May 31.
The loan amount on which the rates are surveyed is $30,000.
Borrowing more? Particularly on fixed-rate home equity loans,
borrowers may find better rates at higher loan amounts.
Auto
loans
Rates: 8.10 percent (60-month, new car); 8.85 percent (36-month,
used car)
The average five-year new-car loan rate eked out a gain, rising
to 8.10 percent. The average three-year and four-year new-car
loan rates were unchanged at 8 percent and 8.05 percent, respectively.
The average used car loan rate held at 8.85 percent. Prior
to the average five-year new-car loan rate breaking through
the 8 percent barrier in August 2005, the average had fluctuated
in the 7's since the beginning of 2003. The average used-car
loan rate is the highest since February 2003 but has only
climbed from a low of 8.05 percent in January 2004.
Certificates
of deposit Yields:
3.78 percent (1-year CD yield); 4.14 percent (5-year CD yield)
The rising rate environment continues to be good news for
cash investments. This week, the yields on shorter maturities
were largely unchanged while yields on longer-term CDs inched
higher. This is in contrast to the prevailing trend of the
past two years where maturities of one year and less have
been on a tear, while the response on longer maturities has
been sluggish. The average three-year and five-year CD yields
increased for the third week in a row, rising to 3.94 percent
and 4.14 percent, respectively. The average five-year CD yield
is the highest since July 2002, while the average three-year
CD yield is the highest since September 2001. The average
three-month and six-month CD yields remained at 2.74 percent
and 3.3 percent, respectively, while the average one-year
CD yield inched higher to 3.78 percent.
Credit
cards Rates: 13.08 percent (standard fixed);
14.28 percent (standard variable)
Unfortunately for cardholders, credit cards are offering no
relief from the struggle against rising interest rates. The
average standard variable rate increased from 14.25 percent
to 14.28 percent, and is up from 13.33 percent one year ago.
Across all classes -- standard, gold and platinum -- the average
variable rate is now 13.67 percent, up from 13.64 percent last
week and 12.08 percent this time last year. Fixed-rate credit
cards held steady at 13.08 percent for standard fixed and 11.71
percent for all classes of fixed-rate cards. Credit card rates
typically lag Fed interest rate moves by up to three months,
so the rate increases are far from over for most variable-rate
cardholders. A subsequent rate hike at the end of June would
trickle through to cardholders in the third quarter of the year.
