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 Jan. 24, 2007.
Mortgages Rate: 6.32 percent (30-year fixed) Average points: 0.34
Mortgage rates rose a small amount this week and have gone up in six of the last seven weeks -- the exception was a week in which rates were unchanged. The 30-year rate hasn't fallen since the first week of December. Rates have been drifting upward as it dawns on investors that Federal Reserve officials are serious when they say that they are still uncomfortable with the rate of inflation. That's a strong hint that the Fed won't cut rates in the first half of this year and that, in fact, the central bank is more likely to hike rates than cut them. (The Fed is expected to keep rates steady at least through the end of June.) The average 30-year fixed rate rose 6 basis points to 6.32 percent from 6.26 percent. A basis point is one-hundredth of a percentage point. The average 15-year fixed, which is a popular option for refinancing, rose 4 basis points, to 6.07 percent. On bigger loans, the average jumbo 30-year fixed rose to 6.56 percent from 6.52 percent. Adjustable-rate mortgages went up by small amounts, too. The popular 5/1 ARM rose 1 basis point, to 6.21 percent, while the 1-year ARM rose 4 basis points, to 6.04 percent.
Home equity products Rates: 8.14 percent (line of credit); 7.92 percent (loan) Home equity products balanced each other out. The average home equity line of credit went up 1 basis point, to 8.14 percent, 11 basis points shy of the prime rate. Most HELOCs are indexed to the prime rate. The prime rate in turn is hitched to the federal funds rate set by the Federal Reserve's rate-setting committee. That committee meets next week, but a series of speeches in recent weeks by Fed governors made it clear they will likely leave the federal funds rate alone. With no movement of the funds rate since June and none expected any time soon, home equity rates have stayed flat for months. Fixed-rate home equity loans fell 1 basis point this week, to 7.92 percent.
Auto loans Rates: 7.88 percent (60-month, new car); 8.7 percent (36-month, used car)
What went up last week comes down this week. The 60-month new-car loan has dropped to 7.88 percent, from 7.95 percent last week. The 48-month loan declined 6 basis points to 7.83 percent, and the 36-month loan is down 5 basis points, to 7.76 percent. The 36-month used-car loan dropped 10 basis points, to 8.7 percent, but the 48-month used-car loan remained at 8.81 percent. General Motors is offering a $750 cash bonus to salespeople for every 2005 or 2006 model they sell through Feb. 14. This offer won't put money in your pocket, but you might be able to negotiate a good deal because the salespeople will be motivated to make the sale.
Certificates of deposit Yields: 3.77 percent (1-year CD yield); 4.03 percent (5-year CD yield)
CDs continue their lengthy siesta. The averages barely budged this week. Recent economic news hasn't been too shabby, and talk of a recession, which was loudly hinted at just a couple months ago, appears to have evaporated. This means it's unlikely that the Fed will cut rates anytime soon. But is the Fed likely to raise rates? Probably not anytime soon, so expect this limbo to continue. Here's a look at this week's numbers.
The average one-year CD dropped a basis point to 3.77 percent, as did the six-month which now stands at 3.55 percent. The five-year average rose by a basis point to 4.03 percent. For the jumbos, the average one-year and five-year yields were unchanged for the week, coming in at 4.24 percent and 4.27 percent, respectively. The six-month jumbo shed a basis point and now averages 4.05 percent.
Credit cards Rates: 13.33 percent (standard fixed); 14.72 percent (standard variable)
There are no changes reported on the interest rates for any credit card this week. The standard fixed rate is 13.33 percent and the variable is 14.72 percent. For all cards -- standard, gold and platinum -- the fixed rate remains at 11.89 percent, and the variable rate sits at 13.93 percent. The Senate Banking Committee will begin hearings on credit card practices tomorrow, and it is expected to look at skyrocketing fees, billing methods and disclosure. These hearings won't affect rates, but the government might force the card issuers to tidy up their businesses.
Yields: 3.77 percent (1-year CD yield); 4.03 percent (5-year CD yield)