Mortgage rates fell dramatically with the announcement of a government takeover of Fannie Mae and Freddie Mac. According to Bankrate.com's weekly national survey, the average conforming 30-year fixed mortgage rate plunged from 6.55 percent to 6.15 percent. According to Bankrate.com's weekly national survey of large lenders, the average 30-year fixed mortgage has an average of 0.43 discount and origination points.

The average 15-year fixed rate mortgage popular for refinancing dropped to 5.81 percent, while the average jumbo 30-year fixed rate dipped modestly to 7.41 percent. Adjustable mortgage rates were also lower, with the average 3/1 ARM retreating to 6.08 percent and the average 5/1 ARM sinking to 6.08 percent.

Mortgage rates posted the biggest one-week drop since March, taking fixed mortgage rates to levels last seen in May. The decline in mortgage rates came as the margin between fixed mortgage rates and risk-free Treasuries contracted from a 22-year high just one week ago. With spreads currently in the neighborhood of 250 basis points, down from more than 280 basis points last week, they're still far above the historical norms of 160-180 basis points. With the record number of delinquencies and foreclosures, coupled with the ongoing credit crunch, mortgage rates are likely to remain at wider than usual spreads for some time to come. The takeover is already paying dividends through lower mortgage rates, and puts some additional buying power behind well-qualified borrowers.

One month ago the average 30-year fixed mortgage rate was 6.74 percent, meaning that a $200,000 loan would have carried a monthly payment of $1,295.87. But at today's rate of 6.15 percent, a $200,000 loan would mean a monthly payment that is $77 per month lower, at $1,218.46.

                              SURVEY RESULTS
  30-year fixed: 6.15% -- down from 6.55% last week (avg. points: 0.43)
  15-year fixed: 5.81% -- down from 6.09% last week (avg. points: 0.38)
     5/1 ARM: 6.08% -- down from 6.29% last week (avg. points: 0.40)

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.

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. More than half of respondents, 57 percent, expect rates to fall further with just 14 percent predicting a rebound. The remaining 29 percent forecast that mortgage rates will remain more or less unchanged in the next 30 to 45 days.

About Bankrate, Inc. (NASDAQ:RATE)

The Bankrate network of companies includes Bankrate.com, Interest.com, Mortgage-calc.com, Nationwide Card Services, Savingforcollege.com, Fee Disclosure and InsureMe. Each of these businesses helps consumers to make informed decisions about their personal finance matters. The company's flagship brand, Bankrate.com is a destination site of personal finance channels, including banking, investing, taxes, debt management and college finance. Bankrate.com is the leading aggregator of rates and other information on 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 2007, Bankrate.com had nearly 60 million unique visitors. Bankrate.com provides financial applications and information to a network of more than 75 partners, including Yahoo! (NASDAQ:YHOO) , America Online (NYSE:TWX) , The Wall Street Journal and The New York Times (NYSE:NYT) . Bankrate.com's information is also distributed through more than 500 newspapers.

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