According to the Orange County Register interest rates are at the lowest levels since last January.  This will definitely help home owners in several ways.  The chance to refinance at a lower rate and a chance to motivate some of the buyers on the sidelines to take advantage of the lower home prices and interest rates.  According to Bankrate.com fixed rates are the best option for buyers. This is a win win for all!

The Newspaper Chart Services reported today that the average this week for a 30-year, fixed-rate mortgage with a 1 point fee was 5.867%, down from 6.015% last week. That’s the lowest since Jan. 11, 2007, when the average 30-year fixed rate hit 5.854%.

The rate for 30-year fixed loans briefly hit 5.955% Dec. 6, but immediately jumped back above 6%, where rates remained stuck for the last half of 2007. However, mortgage rates got a nudge down this week when the yield on 10-year Treasurys dropped to 3.8%. Long-term mortgage rates typically track 10-year notes.

Jumbo rates on 30-year fixed loans — those over $417,000 — with a 1 point fee were also down. Jumbos averaged 6.788% this week compared to 6.919% last week. But they still have a way to go to get down to the 6.181% average jumbo rate of a year ago.

One-year adjustable rate mortgage also dipped, but are no longer the same bargain as fixed-rate loans. The average local ARM rate was 5.032% this week, down from 5.069% last week.

The percentage difference between the 30-year fixed and an ARM was only 0.835, one of the lowest spreads in the last seven years. Bankrate.com, which tracks mortgage rates nationwide, said the current fixed rates are now the best option for borrowers.