Average interest rates on U.S. mortgage loans fell for the ninth consecutive week, according to mortgage giant Freddie Mac Wednesday, falling to a new all-time low, making mortgage loans more palatable to borrowers around the country.

The rate on a 30-year fixed rate loan dropped to 5.10 percent, excluding fees, during the week ended December 31, 2008, down from 5.14 percent. One year ago, the average rate was almost an entire point higher at 6.07 percent.

“Interest rates for 30-year fixed-rate mortgages fell for the ninth straight week and represented a third consecutive all time record low since Freddie Mac’s survey began in April 1971,” said Frank Nothaft, Freddie Mac vice president and chief economist. “… As a result, the number of refinance applications for conventional mortgages jumped over 500 percent between the weeks ending on October 31st and December 26th.”

“Lower rates and falling house prices are also making homeownership more affordable to potential homebuyers,” Nothaft added. “For instance, house prices fell 18 percent over the 12-month period ending in October, according to the S&P/Case-Shiller 20-city composite index. Every city posted a second consecutive month of decline in October. From its peak set in July 2006, the composite index is down 23.4 percent.”

Rates also dropped significantly on the 15-year fixed rate mortgage to an average of 4.83 percent from 4.91 percent the previous week, representing a four and a half year low. Last year at this time, the average rate was 5.68 percent.

Short-term loans also experienced interest rate drops as the one-year adjustable rate mortgage carried an average rate of 4.85 percent, down from 4.95 percent one week earlier. During the same week in 2007, the average rate was 5.47 percent.