The average U.S. 30-year fixed mortgage rate fell this week to 4.85%, the lowest on record, on a government plan to increase purchases of mortgage-backed bonds and buy as much as $300 billion of Treasuries.

The average rate is the lowest in the Freddie Mac weekly survey dating to 1971, the McLean, Va., government-sponsored enterprise said Thursday. The rate fell 13 basis points from last week, Freddie said.

The Federal Reserve Board said March 18 that it will purchase up to an additional $750 billion of mortgage-backed securities from Fannie Mae, Freddie Mac and the Government National Mortgage Association.

The Fed is trying to lower rates by reducing the supply of outstanding mortgage bonds, raising their price and lowering yields. That would let banks cut rates on new mortgages and still sell mortgage securities at a profit.

The average 15-year mortgage rate slipped 3 basis points this week, to 4.58%, Freddie said.

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