Mortgage Rates Climb to a 4-Year High

Mortgage rates rebounded this week, returning to their highest level in more than four years.

The average rate on 30-year fixed-rate loans edged up to 6.80 percent for the week ending Thursday, up from 6.79 percent the week before. That's the highest level since late May 2002 when the 30-year loan rate stood at 6.81 percent.

A year ago, the 30-year mortgage rate averaged 5.73 percent.

Freddie Mac said the 15-year rate rose to an average of 6.41 percent from 6.37 percent the previous week, and up from 5.32 percent.  Five-year adjustable-rate mortgages rose last week, averaging 6.36 percent. The five-year ARM averaged 5.26 percent a year ago. The average one-year adjustable-rate mortgage climbed to 5.80 percent from 5.75 percent. At this time last year, the loan averaged 4.42 percent.

For homeowners using adjustable rate mortgages, a rise in interest rates can mean ballooning payments.

The Mortgage Bankers Association estimates that some $330 billion worth of ARMs will adjust in 2006 and $1 trillion worth will reset by the end of 2007.