TO BUSINESS EDITOR:

NEW YORK, Dec. 18 /PRNewswire-FirstCall/ -- Mortgage rates plunged for the second consecutive week, hitting an eleven-week low. The average 30-year fixed rate mortgage fell from 5.92 percent to 5.81 percent, according to Bankrate.com's weekly national survey of large lenders. The average 30-year fixed rate mortgage is now the lowest since Oct. 1. The mortgages in this week's survey had an average 0.4 discount and origination points.

The 15-year fixed rate mortgage popular for refinancing declined by a similar amount, falling from 5.27 percent to 5.14 percent. The jumbo 30-year fixed rate mortgage retreated 13 basis points to 6.09 percent, while the one- year adjustable rate mortgage dropped 6 basis points to 3.96 percent. A basis point is one-hundredth of 1 percentage point.

A tame inflation report was welcome news to bond investors, who snapped up long-term Treasury securities in response. Bond yields fell, and so did mortgage rates, which are closely related to the yields on long-term government bonds. Absent the threat of inflation, demand for bonds increases as the purchasing power of future bond payments is not eroded. Low inflation is also a cornerstone policy of the Federal Reserve's rate-setting committee. With inflation nowhere in sight, the Fed has pledged to leave interest rates low for a considerable period.

Monthly mortgage payments decline with interest rates. Two weeks ago, when the average 30-year fixed rate mortgage was 6.07 percent, the monthly payment for a $165,000 loan was $996.70. With the average rate at 5.81 percent this week, the same size loan would carry a monthly payment of $969.19. The difference in monthly payments of $27.51 amounts to more than $9,900 over the loan term.

                                SURVEY RESULTS

     30-year fixed: 5.81% -- down from 5.92% last week (avg. points: 0.4)
    15-year fixed: 5.14% -- down from 5.27% last week (avg. points: 0.39)
      1-year ARM: 3.96% -- down from 4.02% last week (avg. points: 0.26)

Bankrate's national weekly mortgage survey is conducted each Wednesday from data provided by the top 10 banks and thrifts in the top 10 markets.

For a full analysis of this week's move in mortgage rates, go to http://www.bankrate.com/mortgagerates

About Bankrate, Inc.

Bankrate, Inc. (Nasdaq: RATE) owns and operates Bankrate.com, the Internet's leading consumer banking marketplace. Bankrate.com averages 4 million unique visitors per month, according to comScore Media Metrix, which ranks Bankrate.com first in unique visitors in the "Financial Information and Advice" category. Bankrate.com reviews more than 4,800 financial institutions in more than 300 markets in 50 states. Bankrate.com is a destination site of personal finance channels, including banking, investing, taxes and small business finance. It is the leading aggregator of more than 190 financial products, including mortgages, credit cards, new and used auto loans, money market accounts and CDs, checking and ATM fees, home equity loans and online banking fees. Bankrate.com provides financial applications and information to a network of more than 80 partners, including Yahoo! (Nasdaq: YHOO), America Online (NYSE: AOL), The Wall Street Journal (NYSE: DJ) and The New York Times (NYSE: NYT). Bankrate.com's information is also distributed through more than 100 national and state publications. The Company's stock is included in the Russell 3000 Index and the Russell 2000 Index.

SOURCE  Bankrate, Inc.