A recent report shows that people looking to refinance their mortgage loans are avoiding adjustable-rate mortgages in favor of loans with longer terms.

According to data from Freddie Mac, the fourth quarter of 2009 saw that 95 percent of home refinance loans were made up by fixed-rate loans. The high number of people refinancing into a fixed-rate loan seemed to be independent of the kind of loan they had before.

“The lowest fixed-rate interest rates in more than a generation, coupled with the comfort that a constant monthly principal and interest payment provides the homeowner, are important drivers in fixed-rate product choice,” said Frank Nothaft, vice president and chief economist for Freddie Mac.

According to Freddie Mac, the most popular type of loan chosen for home refinance was the 30-year fixed-rate loan. However, some consumers are also opting for 15-year fixed-rate loans. Nothaft said the reason for this may be because people have become more interested in paying off their mortgages in a shorter period of time.

For example, 14 percent of those who had a 30-year fixed mortgage opted to refinance in to 15-year fixed, while 5 percent went for a 20-year fixed. Fifty-five percent of people who had a 20-year fixed mortgage refinanced into a 15-year fixed loan.

Of those with a 15-year fixed rate, 70 percent decided to refinance into a mortgage with the same term length. Meanwhile, 28 percent who had a 15-year fixed ended up refinancing into a longer-term of 30 years.

According to a recent report from the Mortgage Bankers Association, the average interest rate on a one-year adjustable mortgage declined from 6.68 to 6.67 percent during the second week of February. Of all mortgage activity, 69.3 percent was accounted for by home refinancing.

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