BLOOMINGTON - David Rutledge likens mortgage interest rates to a game of "Deal Or No Deal."

"Do I stop? I've got the offer on the table. Or do I take the next one?" said Rutledge, president and chief executive officer of First State Bank of Bloomington on Prospect Road.

Nationally, the 30-year-fixed rate mortgage this week averaged 5.69 percent with an average 0.5 points, the lowest since July 2005, according to Freddie Mac's weekly survey released Thursday. That percentage follows other drops since the rate hit a previous two-year low of 5.96 with an average of 0.4 points in December but then rose the next week to 6.11 percent with 0.5 points. The fewer points associated with a mortgage, the higher the interest rate.

As mortgage rates in Central Illinois continue to tread down in tandem with a national economy, and some fearing a future recession, homeowners and potential buyers are faced with the decision of whether - and when - to refinance or buy a new home. The uncertainty of when rates will bottom out makes it tricky for savvy consumers who want to get the best deal, but local bank executives have some tips to ensure homeowners don't miss a good opportunity.

Consumers should consider their level of risk, Rutledge said. You could miss a great rate if you're too concerned with getting the lowest percentage and then interest rates rise suddenly, he said. Instead, know how much you can afford and whether you can accomplish your goal with the current interest rate. If so, maybe you don't need to gamble, Rutledge said.

"If you're going to shop, you need to pick what rate you're looking for," Rutledge said.

Homeowners who may want to refinance should consider a couple general rules, said Randy Clark, vice president of Busey Bank in Bloomington. Usually, homeowners will find it worthwhile to refinance if the interest rate is 1 percent lower than their current rate and if they can recoup their closing costs within a year, Clark said. With a loan larger than $200,000, homeowners may find it beneficial to refinance with a three-quarter point drop, Clark said.

Some people even can catch a break with just a half-point or even a quarter-point drop, especially if they plan to live in the house for the long-term, Rutledge said.

Homeowners who know they'll only live in the house for two or three more years might want to refinance for an adjustable rate, and families with adjustable rates that are set to readjust may want a 30-year-fixed rate now, he said.

Take a look at some of the math.

A person who got a 30-year-fixed rate mortgage for a $200,000 loan at 6.5 percent, a standard recent rate, would pay $1,265 a month. Refinance for a 30-year rate at 5.625 percent, First State Bank's rate Thursday, and pay $1,151 a month, a savings of $114 a month. With closing costs at $800, the homeowner would recoup the cost to refinance in about seven months.

"For that person to refinance would definitely be a yea, quickly," Rutledge said.

For that same loan, a person also could refinance for a 15-year fixed rate at 5 percent. The monthly payment would be about $300 more at $1,582 a month, but the homeowner would cut the term of the mortgage in half and save "big time" on interest, Rutledge said.

All signs point to lower rates still to come in 2008, but not another half-percent in one month, as we just had, Clark said. He also doesn't think they'll fall lower than 5.25 percent.

"It's not like it's going to go down another percent or two," Clark said. "If it makes sense, you may just want to jump in instead of trying to catch that last eighth or quarter of a percent."