In a weekly tracking report Freddie Mac said the average 30-year fixed mortgage interest rate fell from 3.37 percent to 3.35 percent with an average 0.7 points, Freddie Mac said.
A year earlier, interest rates for 30-year, fixed-rate loans were at 3.95 percent.
For 15-year loans, interest rates held steady at 2.65 percent with an average 0.7 of a point. A year ago, 15-year loan rates averaged 3.24 percent.
Average interest rates for five-year adjustable-rate mortgages were at 2.7 percent with 0.7 of a point. down from 2.71 percent. In the same week of 2011, rates for five-year ARM contracts stood at 2.88 percent.
The average interest rate for one-year ARM contracts rose from 2.52 percent to 2.56 percent in the week with an average 0.5 point. A year earlier, rates for one-year ARM loans stood at 2.78 percent.
Freddie Mac Vice President and Chief Economist Frank Nothaft said the low rates were saving homeowners money.
"The 30-year fixed-rate mortgage averaged 3.66 percent for 2012, the lowest annual average in at least 65 years. Rates on 30-year fixed mortgages were nearly 0.6 percentage points below that of the beginning of the year, which translates into an interest payment savings of nearly $98,600 over the life of a $200,000 loan," Nothaft said.
"Moreover, opting for a 15-year fixed mortgage at today's rates, a homeowner could save an additional $138,400 in interest payments," he said.