Released: November 26, 2008

Mortgage-seekers benefiting from Fed’s new credit plan

Source: Nancy Trejos, Washington Post (Free Registration)

For consumers looking for a mortgage, the Federal Reserve’s plan to boost spending is already bringing relief from high interest rates. But for those hoping to use plastic more freely this holiday season, they likely will have to wait.

The Fed’s $200 billion plan immediately sparked a drop in the average rate for a prime 30-year fixed-rate loan, from 5.8 percent on Monday to 5.5 percent yesterday, said Guy Cecala, publisher of Inside Mortgage Finance Publications. Just two weeks ago, it was 6.5 percent.

“You should see mortgage rates near or about 5 percent by early next year, and that should mean smaller payments that people will have to pay on loans,” he said. 

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