Thursday, August 11th, 2011, 10:09 am

Mortgage interest rates plummeted to new lows this week as the economy felt the stings of European debt concerns and investors rushed to U.S. Treasurys, a scenario that pushed long-term yields lower.

The 30-year, fixed-rate mortgage fell to 4.32%, its lowest point this year. That's down from 4.39% last week and 4.44% a year earlier, Freddie Mac said in its primary mortgage market survey.

The 15-year, FRM decreased to 3.5% from 3.54% a week earlier and 3.92% last year. In addition, the five-year, Treasury-indexed hybrid, adjustable-rate mortgage hit 3.13%, down from 3.18% last week and 3.56% a year ago.

The one-year, Treasury-indexed ARM averaged 2.89%, down from 3.02% last week and 3.53% a year ago.

Frank Nothaft, vice president and chief economist for Freddie Mac, said mortgage rates eased even further when the Federal Reserve Open Market Committee ensured it would keep the federal funds rate low through at least mid-2013 to nurture anemic economic growth.

Bankrate.com also noted record lows for interest rates, saying credit rating downgrades to the country, Fannie Mae and Freddie Mac were good for mortgages and opened "the door to refinancing for homeowners that missed the chance last year."

The 30-year, FRM hit 4.46% in Bankrate's survey, down from 4.54% last week. Meanwhile the 15-year, FRM hit 3.61%, down from 3.68%.

The 5/1 ARM inched up from 3.23% to 3.24% based on Bankrate's analysis.

Write to: Kerri Panchuk.

Will ‘cherished’ tax breaks face the chopping block?

Real Estate Tax Talk

Congressional approval to raise the debt ceiling will not end the war in Congress over taxes, spending and the deficit. Under the new law extending the debt ceiling, the federal government will reduce spending by $900 billion over a 10-year period and delegate responsibility for even more cuts to a bipartisan 12-member congressional committee, often referred to as the “Super Congress.”

The Super Congress, consisting of six senators and six representatives equally divided by party, will have until Nov. 23, 2011, to develop a plan to reduce the budget deficit by at least $1.5 trillion over 10 years.

If the Super Congress can come up with a plan that seven members agree to, it will go to a vote in both houses of Congress by Dec. 23, 2011. The Super Congress’s proposal will go to an “up or down vote” — that is, it can pass with a simple majority of each house.

And in an exception to most bills that Congress considers, no filibustering or amendments will be allowed. If the Super Congress cannot agree on a plan, or it doesn’t pass Congress, draconian across-the-board spending cuts of about $1.2 trillion will be automatically triggered — something no one wants.