Freddie Mac: Mortgage rates level off, 30-year loans average 4.12%

The cost of getting a mortgage has leveled off, with Freddie Mac saying lenders were offering 30-year fixed-rate home loans this week at an average interest rate of 4.12%. That rate is little changed from the average of 4.15% over the last 10 weeks.

The survey, released Thursday, showed a statistically insignificant decline from the 4.13% average that Freddie Mac reported last week. Interest rates on other types of home loans also leveled off, with the 15-year fixed mortgage averaging 3.23%, down from 3.24% a week ago.

The trend means that solid borrowers are snagging 30-year mortgages at 4.125%, or 4% if they pay lenders the 0.5% of the loan amount that Freddie Mac factors in. Appraisal, title insurance and other third-party expenses are not included in the survey.

Solid borrowers who pay higher points upfront still can obtain 30-year loans in the high 3% range -- remarkably cheap by historical standards, though well above the 3.31% average that Freddie’s weekly survey recorded twice in the fall of 2012.

According to industry insiders, it has become somewhat easier to take advantage of the low rates.

A home loan credit availability index published by the Mortgage Bankers Assn. increased from 115.1 in May to 115.8 in June. Increases indicate a loosening of credit; the index was benchmarked to 100 in March 2012.

John Shrewsbury, chief financial officer at No. 1 mortgage provider Wells Fargo & Co., said lenders now have largely adapted to the safe-lending standards published last year by the Consumer Financial Protection Bureau.

That’s made it a bit easier for them to relax their internal guidelines a bit, Shrewsbury said.

But he noted: “There are still people who might qualify [under the consumer bureau’s guidelines] who perhaps are having trouble getting a loan.”

Wells Fargo, he said, has “reduced its overlays somewhat,” a reference to the tighter lending standards that the bank and many of its competitors impose over the minimum requirements of the consumer bureau and loan backers such as Freddie Mac, Fannie Mae and the Federal Housing Administration.

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