Mortgage rates moved downward last week after three straight weeks of increases.  According to the Primary Mortgage Market Survey released on Thursday by Freddie Mac, average rates for the 30-year fixed-rate mortgage (FRM) during the week ended February 12 dropped from 5.25 percent to 5.16 percent.  Fees and points also moved down from 0.8 point to 0.7.

The 15-year FRM averaged 4.81 percent with 0.7 point for the week compared with 4.92 percent with 0.8 point during the week ended February 5.

Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) moved slightly lower, from 5.26 percent to 5.23 percent.  Fees and points remained at 0.6 point.

One-year Treasury-indexed ARMs were up, averaging 4.94 percent this week compared with an average 4.92 percent last week.  Fees were unchanged at 0.5 point

"Interest rates for 30-year fixed-rate mortgages are almost 1.5 percentage points below 2008's peak set on July 24, 2008, offering many homeowners an incentive to refinance," said Frank Nothaft, Freddie Mac vice president and chief economist.  "This would translate into a monthly payment savings of around $188 on a $200,000 mortgage.

"The Bureau of Economic Analysis estimated that the weighted average mortgage rate of loans outstanding was about 6.2 percent in the fourth quarter of 2008.  As a result, the share of refinancing among the total number of conventional mortgage applications has exceeded 50 percent for the past 11 weeks and averaged 80 percent over this period, according to the Mortgage Bankers Association."

Earlier in the week Fannie Mae released results of its survey of weekly mortgage yields for the period ended February 9.  Servicing fees are not included in the figures.

The average yield on a conventional 30 year FRM was 4.73 for the week compared to 4.72 a week earlier.  The 15-year FRM was also down slightly from 4.3 percent to 4.24.  Government guaranteed FHA/VA 30 year loans climbed to 6.23 from 6.05.

One-year ARM yields averaged 4.56 percent compared to 4.70 the week before.