Conventional mortgage interest rates dropped in December, according to the Federal Housing Finance Agency (FHFA). The average interest rate for a 30-year fixed-rate mortgage (FRM) of $417,000 or less was 5.05% in December, down from 5.09% in November. The average interest rate on 15-year, FRM of $417,000 or less was 4.54%, down from 4.63% in November. The average rate for all mortgages was 4.92% in December, down from 5% in November, while the effective interest rate, which reflects the amortization of initial fees and charges, was 5.01% in December, down from 5.09% in November. The FHFA calculates rates from its monthly interest rate survey of purchase mortgages, these results reflecting loans closed from December 24-31. Since the interest rate is determined 30 to 45 days before the loan is closed, the FHFA’s report depicts market conditions in mid- to late-November. The national average contract mortgage rate for the purchase of previously occupied homes by combined lenders, commonly used as an index in some adjustable-rate mortgages (ARM) contracts, was 4.92% based on loans closed in December, down from 5.01% in November. Origination points for initial fees and charges average 0.62% of the loan balance in December, up from 0.61% in November, but 45% of the purchase-money mortgage loans originated in December were "no-point" mortgages, up from 44% in November. The average repayment term was 27.4 years in December, down 0.6 years from 28.0 years in November. The average loan-to-price ratio remained steady in December at 73.9%, while the average loan principal was $217,800 in December, up $6,600 from $211,200 in November. Write to Austin Kilgore.