Originally published August 5, 2010 at 6:13 PM | Page modified August 5, 2010 at 6:24 PM

15-year mortgage rates at historic low, but few can apply

A plunge in mortgage rates is giving homeowners a rare opportunity to lock in a 15-year fixed-rate loan for less than 4 percent.

By ALAN ZIBEL

The Associated Press

WASHINGTON — A plunge in mortgage rates is giving homeowners a rare opportunity to lock in a 15-year fixed-rate loan for less than 4 percent.

Rates haven't dipped this low in decades. For those who can qualify, it's the chance to pay off a home in half the time while saving tens of thousands of dollars — if not more.

But the lower rates on short-term loans are not likely to ignite the refinancing market.

Most people can't afford the higher monthly payments required by a 15-year fixed mortgage compared with a more traditional 30-year loan.

Applications to refinance loans rose 1.3 percent last week and those to purchase homes increased 1.5 percent, according to the Mortgage Bankers Association. That's hardly enough to energize the housing market.

Rates have fallen since spring as investors seek the safety of U.S. Treasury bonds. That has lowered the yield on Treasurys. Mortgage rates tend to track those yields.

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