Inflation News Pushes Mortgage Rates Higher

New York, New York, USA, 15 June 2006 -- /PRNewswire/ -- Fixed mortgage rates increased following the release of the May Consumer Price Index, which showed inflation still lurks. The average 30-year fixed rate mortgage inched higher from 6.69% to 6.71%, according to Bankrate.com's weekly national survey of large lenders. The 30-year fixed rate mortgages in this week's survey had an average of 0.35 discount and origination points.

The average 15-year fixed rate mortgage popular for refinancing rose to 6.36%. On larger loans, the average jumbo 30-year fixed rate nosed upward to 6.88% from 6.86%. Adjustable rate mortgages were mixed. The average 5/1 adjustable rate mortgage dipped to 6.31%, and the average one-year ARM climbed to 5.94%.

Mortgage rates have bobbed up and down over the past month, moving only slightly from one week to the next. Even a higher-than-expected increase in consumer prices barely caused a ripple in mortgage rates. The latest inflation news assures a rate hike at the Federal Open Market Committee's next meeting June 28-29. While short-term interest rates continue to rise, longer term instruments are showing little reaction. Mortgage rates are closely related to yields on long-term government bonds.

Fixed mortgage rates are considerably higher than one year ago. This time last year, the average 30-year fixed mortgage rate was 5.73%, meaning that the monthly payment on a loan of USD 165,000 was USD 960.80. With the average 30-year fixed rate now 6.71%, the same loan originated today would carry a payment of USD 1065.80. Fixed mortgage rates remain an attractive refinancing alternative for adjustable rate borrowers facing sharp payment adjustments.

SURVEY RESULTS

30-year fixed: 6.71% -- up from 6.69% last week (avg. points: 0.35)

15-year fixed: 6.36% -- up from 6.31% last week (avg. points: 0.33)

5/1 ARM: 6.31% -- down from 6.32% last week (avg. points: 0.33)

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. This week, the majority of respondents, 63%, predict mortgage rates will rise further in the next 30 to 45 days. Of the remainder, just 13% expect rates to decline while 24% forecast that rates will stay unchanged.

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

About Bankrate, Inc.

Bankrate, Inc. (NASDAQ:RATE) 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 4800 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), America Online (NYSE:TWX), The Wall Street Journal (NYSE:DJ) and The New York Times (NYSE:NYT). 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.