Fixed mortgage rates lowest on record

Story highlights

  • Fixed-rate mortgages hit record lows, Freddie Mac says
  • Federal Reserve moves to lower interest rates on mortgages, business loans

Fixed mortgage rates hit their lowest levels since Freddie Mac began tracking them, the agency reported Thursday.

Based on its survey, Freddie Mac said a 30-year, fixed-rate mortgage averaged 4.01%, down from 4.09% last week.

The 15-year, fixed-rate average was 3.28%, down from 3.29%.

Interest rates for adjustable rate mortgages were nearly unchanged as the Federal Reserve prepared to sell $400 billion in short-term Treasury securities.

The Federal Reserve announced "Operation Twist" last week, a widely expected stimulus move reviving a policy from the 1960s.

The policy involves selling the short-term Treasuries in exchange for the same amount of longer-term bonds, starting in October and ending in June 2012.

While the move does not mean the Fed will pump additional money into the economy, it is designed to lower yields on long-term bonds, while keeping short-term rates little changed.

The intent is to thereby push down interest rates on everything from mortgages to business loans, giving consumers and companies an additional incentive to borrow and spend.