U.S. 30-year mortgage rates fall in latest week

WASHINGTON, March 20 (Reuters) - U.S. 30-year mortgage rates plunged in the latest week, home funding giant Freddie Mac FRE.N said on Thursday.

U.S. 30-year mortgage rates fell to an average of 5.87 percent from 6.13 percent a week earlier, while 15-year mortgages averaged 5.27 percent compared to 5.60 percent last week.

Short-term rates remained nearly unchanged as one-year adjustable rate mortgages (ARM) rose slightly to 5.15 percent in the week from 5.14 percent a week earlier.

Freddie Mac said the "5/1" ARM, set at a fixed rate for five years and adjustable each following year, averaged 5.56 percent, down from 5.58 percent the prior week.

"Mortgage rates fell this week as various actions were taken to improve market liquidity," said Frank Nothaft, Freddie Mac vice president and chief economist, in a statement.

On Tuesday the Federal Reserve cut the federal funds rate by three-quarters of a percentage point to 2.25 percent.

A year ago, 30-year mortgage rates averaged 6.16 percent, 15-year mortgages 5.90 percent and the one-year ARM 5.40 percent. The 5/1 ARM averaged 5.91 percent.

Lenders charged an average of 0.5 percent in fees and points on 30- and 15-year mortgages, both unchanged from last week. They charged 0.9 percent on the 5/1 ARM, up from 0.6 percent the prior week. Fees and points charged on the one-year ARM rose to an average of 0.8 percent from 0.7 percent.

Freddie Mac is a mortgage finance company chartered by Congress that buys mortgages from lenders and packages them into securities to sell to investors or to hold in its own portfolio. (Reporting by Ayesha Rascoe; Editing by Andrea Ricci)