Mortgage rates have fallen to their lowest levels in over two years.

That's good news, provided you can still get a loan.

The average rate on 30-year, fixed-rate mortgages fell 20 basis points to 5.87% over the week ended Thursday, according to a survey by Freddie Mac ( FRE)

A basis point is a hundredth of a percentage point.

The mortgages in this week's survey had average origination fees and discount points of 0.4% of the total loan amount, down from 0.5% last week

Rates on 30-year, fixed-rate mortgages haven't been this low since September 2005.

Unfortunately for anyone looking to purchase a home or refinance an existing loan, lending standards are much tighter then they were two years ago. Back then, at the peak of the housing market, it seemed like all you had to have to get a loan was a pulse.

Since then, a lot of mortgages made to people who had poor credit or who didn't make down payments or document their income have gone bad. That has made it hard for banks to unload any loans that don't meet the strict standards necessary to be purchase by Freddie Mac or its counterpart Fannie Mae ( FNM).

That means borrowers need good credit -- and a down payment.

(For more information about what you need to qualify for a mortgage these days, click here .)

Mortgage rates track yields on long-term Treasury bonds. The decline over the past week came on the back of a bevy of negative economic reports, Freddie Mac's chief economist Frank Nothaft said in a press release.

Most notably, last Friday's weak jobs report showed a 0.3 percentage point jump in unemployment, leaving it at its highest level since November 2005. But a disappointing growth in service sector measured by the Institute for Supply Management's index of non-manufacturing business activity and the drop in the National Association of Realtors pending home sales index also contributed.

"These weak economic reports renewed concerns about economic conditions in the near future," said Nothaft. "As a result, mortgage rates came down across the board."

He noted that there has been a pickup in refinance activity as borrowers take advantage of drop in rates over the past two weeks. For the first week of 2008, the Mortgage Bankers Association reported an increase in the refinance share of mortgage applications and the pace of overall applications, both at the highest levels in four weeks.

Other mortgage rates also fell over the week. Rates on 15-year fixed-rate mortgages fell 25 basis points to 5.43% with average fees and points of 0.4%; rates on five-year Treasury-indexed hybrid adjustable-rate mortgages, or ARMs, fell 15 basis points to 5.63%, with a averages fees and points of 0.5%; and rates on one-year Treasury-indexed ARMs fell 10 basis points to 5.37%, with average fees and points of 0.4%.

Freddie Mac surveys lenders about rates on conventional mortgages of less than $417,000 to borrowers with good credit. The survey doesn't reflect rates on jumbo loans of over $417,000 or loans to borrowers with weak credit.

Freddie Mac's numbers are averages. You can search for the best rates offered by lenders in your area on . Just make sure you understand whether the lender is discounting the rate it quotes you by charging a "point," or fee, based on the size of the loan.

Mortgage Rates in Selected Cities
City Term Rate
Boston 30-year fixed 5.875%
New York 30-year fixed 5.5%
Denver 30-year fixed 5.75%
Chicago 30-year fixed 5.774%
Dallas 30-year fixed 5.875%
--no origination fee / 20% down payment / excludes Internet banks / excludes credit unions / loans under $417,000

For more rates, see