Home loans are still quite a bargain. Just not the exceptional bargain they were earlier this winter.
The average cost of 30-year, fixed-rate mortgages, the most popular way to finance a home, is up a quarter of a point since reaching a record low in early December.
The average cost of a 15-year mortgage, which is very popular with borrowers looking to refinance a home, is about a tenth of a percent more than last fall.
Have mortgage interest rates bottomed out?
It's too soon to say. But here's what we do know.
Most mortgages are sold to investors through two government-owned companies called Fannie Mae and Freddie Mac. Because of that, mortgage rates usually rise and fall in sync with the returns on long-term Treasury bills.
The Federal Reserve remains committed to holding long-term interest rates at historic lows until our lethargic economy is growing faster and creating more jobs.
The fact that our GDP unexpectedly contracted in the last three months of 2012 indicates we have a way to go to reach that goal, so there's no reason to expect the Fed will waiver on that.
But investors seem to be shaking the bunker mentality that had them piling into safe assets such as Treasuries no matter how pitiful the returns might be.
After falling to a record low of 1.38% in July, the return on 10-year Treasury bonds surpassed 2% in late January for the first time in nine months.
Mortgage rates are going to follow Treasuries up, and unless something bad happens to drive investors back to their bunkers, the Fed will be able to hold interest rates down, but not as far down as late 2012.
National Average Mortgage Rates
| Type of loan | Current average | Record-low average | Established |
| 30-year fixed rate | 3.78% | 3.50% | Dec. 5, 2012 |
| 15-year fixed rate | 2.97% | 2.84% | Oct. 3, 2012 |
| 30-year fixed jumbo | 4.13% | 3.98% | Dec. 5, 2012 |
| 5/1 ARM | 2.71% | 2.67% | Oct. 3, 2012 |
Savvy borrowers with decent credit can expect to pay a quarter to half of a point less than these average rates.
Search our extensive database of the best interest rates offered by hundreds of lenders for better-than-average deals.
Where you live will have a lot to do with how much you pay.
The cheapest 30-year loans are in Kansas City (3.64%), closely followed by Detroit (3.67%) and Washington, D.C. (3.68%).
The most expensive loans are in Tampa, where the average rate is more than three-quarters of a point higher at 4.40% and Denver (3.96%).
Click here to find the average rates for all 25 major cities we track. You’ll find the data for 30- and 15-year, fixed-rate loans and 5/1 adjustable-rate mortgages (ARMs).
Rates this low mean the payments for principal and interest for the average 30-year loan are a very affordable $464 per month for every $100,000 borrowed.
Use our mortgage calculator to see what your monthly principal and interest payments would be on any fixed-rate loan.
