Oct. 15 (Bloomberg) -- Yields on Fannie Mae, Freddie Mac and Ginnie Mae mortgage bonds slumped relative to government notes, potentially lowering new mortgage rates.

The difference between yields on Fannie's current-coupon 30- year fixed-rate mortgage securities and 10-year Treasuries fell 11 basis points to 190 basis points as of 4:15 p.m. in New York, data compiled by Bloomberg show. A fall in yields on the securities suggested a decline in interest rates on new home loans of about 20 basis points, or 0.20 percentage point.

Demand for the more than $4 trillion of Fannie and Freddie mortgage bonds rose after investors were again offered spreads above the levels seen when the U.S. last month seized the mortgage-finance firms and vowed to support the market. Growing confidence that banks will be bolstered by government action may also be playing a role, said Ajay Rajadhyaksha, the head of fixed-income strategy in New York at Barclays Capital Inc.

``It's about time,'' he said in a telephone interview today. ``As the risk aversion goes away, that should help all spread products,'' he added.

Treasury Secretary Henry Paulson yesterday announced plans to inject $250 billion of capital into thousands of financial firms, following similar moves in Europe intended to unfreeze credit markets.

The yield on Fannie's current-coupon mortgage bonds fell 22 basis points today from a two-month high to 5.87 percent, suggesting a decrease in interest rates on new loans caused partly by lower benchmark Treasury yields. The yield is up from 5.27 percent on Oct. 6. A basis point is 0.01 percentage point.

Mortgage Rates

The average rate on a typical 30-year fixed-rate mortgage rose to 6.28 percent yesterday, according to Bankrate.com data. That compares with as low as 5.72 percent last month and a six- year high of 6.51 percent in July.

Bloomberg current-coupon indexes represent the average of yields for the two groups of mortgage bonds with prices just above and below face value, the ones lenders typically package new loans into. The spread helps determine the rates offered to homeowners on new prime mortgages of $417,000 or less in most areas, and up to $729,500 in high-cost counties.

Washington-based Fannie and Freddie of McLean, Virginia, are government-chartered mortgage-finance companies that were seized Sept. 7 by the U.S. At the time, Paulson said that he would direct the companies to increase their holdings of mortgage securities and have his department start purchases of their bonds to help lower the cost of home financing.

Ginnie is a federal agency that insures mortgage bonds composed of government-backed loans. Issuance of Fannie, Freddie and Ginnie bonds facilitated more than 75 percent of U.S. mortgage lending in the first half of this year after the collapse of the market for other home-loan securities and retreats by banks, according to newsletter Inside MBS & ABS.

To contact the reporter on this story: Jody Shenn in New York at jshenn@bloomberg.net;

Last Updated: October 15, 2008 16:46 EDT