WASHINGTON (AP) - Mortgage applications remained at their highest level in more than five years last week, as borrowers took advantage of attractive rates and rushed to refinance their home loans.

While low rates are a great opportunity for borrowers with solid credit and plenty of equity in their homes, those in danger of foreclosure are sidelined, and defaults are expected to keep rising in the coming months.

The Mortgage Bankers Association said Wednesday its weekly application index was essentially unchanged for the week ending Dec. 26. The index came in at 1245.7 from 1245.4 a week earlier. Applications surged earlier this month to the highest level since July 2003, when refinancing activity boomed at the peak of the housing market.

More than 80 percent of applications came from borrowers looking to refinance at more affordable rates, the trade group said. Refinance volume dipped by 0.4 percent, while purchase volume rose 1.4 percent.

The trade group's application index is still below its peak of 1,856.7, reached in May 2003 at the height of the housing boom. The survey provides a snapshot of mortgage lending activity involving mortgage bankers, commercial banks and thrifts. It covers about half of all new residential mortgage loans each week.

An index value of 100 is equal to the application volume on March 16, 1990, the first week the MBA tracked application volume.

Interest rates have plunged since the Federal Reserve said last month it would buy up to $500 billion in mortgage-backed securities in an effort to bolster the long-suffering housing market. The Fed, starting early next month, will buy securities guaranteed by the government-controlled home loan giants Fannie Mae, Freddie Mac and Ginnie Mae, a federal agency.

The average rate for traditional, 30-year fixed-rate mortgages decreased to 5.03 percent from 5.04 percent a week earlier, according to the MBA report. That was the lowest point in the weekly survey since rates fell to 4.99 percent in June 2003.

The average rate for 15-year fixed-rate mortgages fell to 4.79 percent from 4.91 percent a week earlier, while the average rate for one-year adjustable-rate mortgages fell to 6.15 percent from 6.36 percent.

For more rate offers in your area, check out and enter your ZIP code to find out the best info for your area.

—For more ways to save, spend, invest and borrow, visit MainStreet.com.