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) --

Freddie Mac


announced on Thursday that according to its market survey, interest rates for 30-year and 15-year fixed-rate mortgage loans hit their all-time lows.

The rate declines came on the heels of the Federal Reserve's "Operation Twist," where the central bank announced plans to shift its investment strategy toward longer-term securities, in an effort to push long-term interest rates lower, while keeping short-term rates at very low levels.

According to the mortgage giant -- which like its competitor

Fannie Mae


was taken under government conservatorship in September 2008 -- the national average rate for a conventional 30-year fixed-rate mortgage loan was 4.01% for the weekend ended September 29. The rate declined from 4.09% the previous week and 4.32% a year earlier.

For mortgage loans in the U.S., "conventional" means that the loan meets the standard underwriting requirements for the lender to be able to immediately sell a newly originated mortgage loan to Fannie Mae or Freddie Mac.

According to Freddie, the average rate for a conventional 15-year fixed-rate mortgage loan was 3.28%, declining from 3.29% the previous week and 3.75% a year earlier.

For both fixed-rate averages, Freddie assumed up-front fees, or "points," of 0.7% of a loan's initial principal balance.

The average rate for a 5-year Treasury-indexed hybrid adjustable-rate mortgage -- with a floating rate after five years -- was 3.02% for, which was the same as it was for the previous week, but down from 3.52% a year ago.

For a 1-year Treasury-indexed ARM -- where the rate is fixed for only one year -- the average rate was 2.83%, which was an increase from 2.82% the previous week, but down significantly from 3.48% a year earlier.

For both adjustable-rate averages, Freddie assumed up-front fees, or "points," of 0.6% of a loan's initial principal balance.

According to Freddie Mac chief economist Frank Nothaft, "the spring and summer home-buying season gave a boost to a number of house price indexes," as the "Federal Housing Finance Agency reported that its National index (not seasonally adjusted) rose for the fourth consecutive month in July," while the S&P/Case-Shiller 20-City composite index "rose 0.9 percent between June and July with 17 of the cities experiencing positive monthly growth."


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Written by Philip van Doorn in Jupiter, Fla.

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Philip W. van Doorn is a member of TheStreet's banking and finance team, commenting on industry and regulatory trends. He previously served as the senior analyst for Ratings, responsible for assigning financial strength ratings to banks and savings and loan institutions. Mr. van Doorn previously served as a loan operations officer at Riverside National Bank in Fort Pierce, Fla., and as a credit analyst at the Federal Home Loan Bank of New York, where he monitored banks in New York, New Jersey and Puerto Rico. Mr. van Doorn has additional experience in the mutual fund and computer software industries. He holds a bachelor of science in business administration from Long Island University.