Mortgage loan dropped to a ten year low in January 2010, this has been figured out by the Council of Mortgage Lenders (CML) and revealed today. Total mortgage lending dropped an estimated amount £9.1 billion within the month, a 32% drop on December’s figure and 21% lower than the last year January.

However, this downfall was expected at the starting of the year, the down fall of January shifted lending to its lowest level and this is the lowest since February 2000, and brought to ending months of the rising interest rates from borrowers.

The CML stated that the lending aggravated by the traditional post-Christmas due to the flood of buyers to acquire properties before 31st December 2009, the temporary stamp duty holiday end on houses costs less than £175, 000 and it was probably to be the beginning of the quiet period in house marketing.

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No doubt, 30 year mortgage is the most popular type of home loans among people as it offers a fixed interest rate and monthly payments are lower. But due to the long term mortgage borrowers is required to pay off more interest over the loan life. These mortgages are the best options to purchase home through loans.

A fluctuation in the rates on the 30-year mortgages has been recorded as in comparison with the last year these rates are lower this year. Last year the average rates were about 5.16% where as the average rate this year is nearly 5%.

According to Freddie Mac fixed rate mortgages have faced a drastic downfall from the 4.04% to 4.34%. Likewise, this downfall was also recorded on five year adjustable rate mortgages from 4.27% to 4.19% before a week. While the rise in one year ARMs have been recorded from 4.22% to 4.33%.

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Since start of  December 2009, interest rate for mortgages have reduced to the level of 5 percent. Interest Rates have come down from last weeks’s 5.30%.  This movement in mortgage rates have sparked mixed feeling among borrowers and lenders. Basic reason behind recent movement of mortgage rates is movement in 10 Year treasury rates.

Almost all economic experts agree and relate rise/fall in mortgage rate with movements of fixed treasury rates. As 10 year fixed treasury rates have slowed down, not too much but a reasonable reduction have appeared on boards. Analysts are of the view that mortgage rate will go down further. They are not sure that how much reduction will take place exactly but surely there will be some reduction.

So today if you are thinking to refinance your loan in near future. time has arrived. Please do not wait anymore. Now is the best time to refinance your Home Loan. The Analysts also think that the mortgage rates are likely to  rise to more than 7% in year 2010. Even if you are of the views that it will be round about 6% in 2010. Still it is a great reason to refinance your home loan.

Still many mortgage lenders offer a 5% interest rate. this is the most favorable period to refinance your Home Loan. and relax yourself up to some extent. Because those lenders with 5% interest rate today will offer you a round about 5.5% mortgage rate after first quarter of the year 2010. So get ready to apply today for refinance your loan.

Mortgage interest rates for Jumbo loans have also gone down in previous week. Due to this decline, the difference between normal mortgage rates and jumbo rates is also reduced. Spread has narrowed so to speak.

During Last year, as we entered the credit crisis, banks were very reluctant to give Jumbo Loans. For those lucky few, who got the loan, the interest rate charged on Jumbo loans was sky high. I know a friend who paid 2.5 percent more than the prevailing interest rate for conforming mortgage rates.

Current trend in jumbo mortgage rates is that it is now back to normal. By normal, it means that you can now easily find a Jumbo Loan with mortgage rates that are only less than one percent above the conforming mortgage rates.

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