Interest rates on 30-year fixed-rate mortgages have fallen to their lowest level in more than four years, averaging 5.33 percent, according to financial publishing company HSH Associates.

Borrowers with a high credit score — 740 and higher — who have at least 20 percent equity in their home could see rates as low as 5.13 percent on a 30-year fixed-rate conforming mortgage, a mortgage that is not subprime, says Lou Barnes, a mortgage banker in Boulder, Colo., and they wouldn’t be charged points or an origination fee (“Mortgage Rate Hits a 4-Year Low at 5.47%,” The Wall Street Journal, Dec. 12, 2008).

Rates are so low that they may even tempt borrowers with credit scores between 660 and 700 to refinance, says Chris Freemott, a mortgage broker in Naperville, Ill., but, he warns, these borrowers could wind up paying as much as half a percentage point more than borrowers with higher credit scores. These less creditworthy borrowers would also likely get hit with extra charges levied by Fannie Mae and Freddie Mac, two of the nation’s largest mortgage holders.

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