NEW YORK, Dec. 7 /PRNewswire-FirstCall/ -- Mortgage rates remain in freefall with the average 30-year fixed rate mortgage falling to 6.08 percent, the lowest since Oct. 2005. According to Bankrate.com's weekly national survey of large lenders, the 30-year fixed rate mortgages had an average of 0.25 discount and origination points. Fixed mortgage rates have now fallen for 4 consecutive weeks and five of the past six.

The average 15-year fixed rate mortgage, popular for refinancing, retreated to 5.83 percent. On larger loans, the average jumbo 30-year fixed rate slid to 6.36 percent. Adjustable rate mortgages got in on the act as well. The average 5/1 adjustable rate mortgage dropped below the 6 percent mark to 5.95 percent and the average one-year ARM inched lower to 5.88 percent.

Mortgage rates plunged this week following a report indicating the first contraction in the manufacturing sector since April 2003. The Institute for Supply Management's monthly index of manufacturing came in at a disappointing 49.5. Any reading below 50 indicates that the sector is contracting and is a bearish signal on the economy. Investors have seized upon any news of a softening economy to snap up bonds and drive yields lower, and mortgage shoppers have been the beneficiaries. Mortgage rates are closely related to the yields on long-term government bonds.

Fixed mortgage rates are sharply lower than five months ago, when rates were flirting with 7 percent. At that time, the average 30-year fixed mortgage rate peaked at 6.93 percent, meaning that the monthly payment on a loan of $165,000 was $1,090. With the average 30-year fixed rate now 6.08 percent, the same loan originated today would carry a monthly payment of $997.76. Fixed mortgage rates are a compelling refinancing alternative for adjustable rate borrowers facing sharp payment adjustments.

                                SURVEY RESULTS

    30-year fixed: 6.08% -- down from 6.17% last week (avg. points: 0.25)

    15-year fixed: 5.83% -- down from 5.91% last week (avg. points: 0.23)

       5/1 ARM: 5.95% -- down from 6.01% last week (avg. points: 0.26)

Bankrate's national weekly mortgage survey is conducted each Wednesday from data provided by the top 10 banks and thrifts in the top 10 markets.

For a full analysis of this week's move in mortgage rates, go to http://www.bankrate.com/mortgagerates

The survey is complemented by Bankrate's weekly forward-looking Rate Trend Index, in which a panel of mortgage experts predicts which way the rates are headed over the next 30 to 45 days. The panelists see the good times continuing, with 38 percent predicting rates will fall further. Just 12 percent expect rates to rebound, while half see rates remaining unchanged in the next 30 to 45 days.

For the full mortgage Rate Trend Index, go to http://www.bankrate.com/RTI

About Bankrate, Inc.

Bankrate, Inc. (Nasdaq: RATE - News) owns and operates Bankrate.com, a leading Internet consumer banking marketplace. Bankrate.com is a destination site of personal finance channels, including banking, investing, taxes, debt management and college finance. It is the leading aggregator of more than 300 financial products, including mortgages, credit cards, new and used auto loans, money market accounts and CDs, checking and ATM fees, home equity loans and online banking fees. Bankrate.com reviews more than 4,800 financial institutions in 575 markets in 50 states. In 2005, Bankrate.com had over 46 million unique visitors. Bankrate.com provides financial applications and information to a network of more than 75 partners, including Yahoo! (Nasdaq: YHOO - News), America Online (NYSE: TWX - News), The Wall Street Journal (NYSE: DJ - News) and The New York Times (NYSE: NYT - News). Bankrate.com's information is also distributed through more than 400 national and state publications. In addition to Bankrate.com, Bankrate, Inc. also owns and operates FastFind, an internet lead aggregator and MMIS/Interest.com, which publishes mortgage guides and financial rates and information.

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Source: Bankrate, Inc.

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