Little change in home loan rates

Cost of borrowing could climb if mortgage bonds fall out of favor

Mortgage rates were largely unchanged this week, according to a survey by Freddie Mac taken before investor reaction to the latest attempt by European leaders to address the region’s debt crisis. Stocks soared today on hopes that the plan, which bolsters a European bailout fund, will avert a financial crisis.

Most mortgages are funded by investor purchases of mortgage-backed securities, which are seen as a safe haven during times of economic uncertainty. When bonds fall out of favor with investors, their yields rise, driving up interest rates on mortgages.