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Interest rates on 15-year mortgages have fallen below 3 percent for the first time, as fixed-rate mortgages continued to sink down to new records lows this week.

The average interest rate on 15-year fixed-rate mortgages fell to 2.97 percent this week, according to the weekly Freddie Mac Primary Mortgage Market Survey. It's the lowest rate reported since Freddie Mac began weekly tracking of 15-year mortgage rates in 1991. Last week's average of 3.04 percent was the previous record.

A new record low was also set on 30-year fixed-rate mortgages, which fell to an average rate of 3.75 percent, down from last week's previous record of 3.78 percent. Freddie Mac has been tracking 30-year rates since 1971.

Bucking the trend were initial rates on 5-year adjustable-rate mortgages (ARMs), which edged up to an average of 2.84 percent, up from 2.83 percent last week.

$1,200 annual interest savings vs. 2011

Fixed-rate mortgages are currently running about three-quarters of a percent lower than they were one year ago at this time, while ARMs are more than half a percent lower. The decline in rates means that a borrower who took out a $200,000 30-year mortgage today would save about $1,200 a year compared to the same borrower one year ago, according to Frank Nothaft, Freddie Mac chief economist.

Nothaft said that continuing concerns over the Eurozone debt crisis is contributing to the slide in mortgage interest rates, by sending yields on Treasury bonds lower. Interest rates on both 30- and 15-year fixed-rate mortgages have been trending downward now for seven consecutive weeks without an increase.

Interest rates reported include origination fees and points of 0.8 points on 30-year loans, 0.7 points on 15-year mortgages and 0.6 points on 5-year ARMs. Borrowers may pay other closing costs as well.

First published at: http://www.mortgageloan.com/15-year-rates-drop-below-3-percent-9084

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