US 30-yr fixed mortgage rate up on government plan
NEW YORK, Sept 19 (Reuters) - Interest rates on 30-year fixed-rate mortgages climbed on Friday as a result of news of a sweeping U.S. government plan to contain the credit crisis.
The 30-year fixed-rate mortgage rose to near 6.25 percent on Friday versus 6.16 percent on Thursday and 5.875 percent on Tuesday when the global credit crises was in full swing, according to Greg McBride, senior financial analyst at Bankrate, Inc, in North Palm Beach, Florida.
"The revelation that the Treasury plans to take certain debt off the books of financial institutions helped push mortgage rates higher," he said. "Mortgage rates, however, are still low enough and are not a barrier to affordability."
Global stocks soared and bonds fell as news of a U.S. plan to buy illiquid bank assets and guarantee money market funds, combined with a U.K. and U.S. ban on short-selling financial stocks, raised hopes for an end to the year-long global credit crunch.
U.S. Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke intend to work through the weekend on a plan to deal with mortgage-related assets that are choking the financial system.
Treasury yields, which move inversely to price, are linked to mortgage rates. Treasury yields surged higher on the government's plan.
"Mortgage rates are not the issue, so if you are in the market to buy a house it may be a good time," said McBride. (Reporting by Julie Haviv; Editing by Dan Grebler)
