Mortgage rates remain below 5 percent

updated 12:40 p.m. ET Dec. 17, 2009

Mortgage rates rose for the second consecutive week but the number of homeowners who applied for refinancing remained strong.

The average fixed rate on a 30-year mortgage was 4.94 percent this week, up from 4.81 percent last week, Freddie Mac said Thursday.

Mortgage rates are closely tied to yields on long-term government debt, which have risen since the average fixed rate on 30-year mortgages hit a record low of 4.71 percent the week of Dec. 3.

A Federal Reserve program to buy $1.25 trillion in mortgage-backed securities has kept rates on 30-year mortgages around 5 percent this year. The program, geared to make home buying more affordable, is set to end next spring.

The low rates resulted in a wave of refinancing activity: Roughly three out of four mortgage applications were for refinancing during the first two weeks of December, the Mortgage Bankers Association reported.

Freddie Mac collects mortgage rates each week from lenders around the country. Rates often fluctuate, even within a given day.

The average rate on a 15-year fixed mortgage rose to 4.38 percent from 4.32 percent last week.

Rates on five-year, adjustable-rate mortgages averaged 4.37 percent, up from 4.26 percent last week. Rates on one-year, adjustable-rate mortgages rose to 4.34 percent from 4.24 percent.

The rates do not include add-on fees known as points. The nationwide fee for loans in Freddie Mac's survey averaged 0.7 point for 30-year loans. The fee averaged 0.6 point for 15-year and five-year loans, and 0.5 point for one-year mortgages.

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