More than 95% of refinancing borrowers chose fixed-rate loans in the fourth-quarter of 2011, Freddie Mac said in its quarterly product transition report.

The GSE said refinancing borrowers overwhelmingly continued to prefer fixed-rate loans even if their original loans were adjustable-rate mortgages.

Of those borrowers in a 30-year, FRM, 43% decided to refinance into shorter loan terms of 15- or 20-years, Freddie's report said.

Meanwhile, 58% of borrowers with hybrid ARMs moved into fixed-rate loans during the fourth quarter, while the remaining 42% chose to refinance into the same type of loan product they held earlier.

"Fixed mortgage rates averaged 4% for 30-year loans and 3.30% for 15-year loan products during the fourth quarter," said Frank Nothaft, vice president and chief economist for Freddie Mac.

Borrowers wanting lower refinance rates were able to get them even when shortening their loan terms in the fourth-quarter.

The interest rate on a 15-year, FRM was only 0.7 percentage points lower than the 30-year, FRM during the fourth quarter, Nothaft said. "And for borrowers who plan to remain in their current home for only a few years, the hybrid ARM allows for even a greater interest-rate savings. The initial interest rate on a 5/1 hybrid ARM was about 1.1 percentage points lower than on a 30-year fixed-rate loan."