NEW YORK (CNN/Money) - Mortgage rates fell for the fifth straight week, hitting another record low as the threat of deflation keeps borrowing costs low, lender Freddie Mac said Thursday.

The 30-year mortgage sank to an average 5.45 percent this week, with an average of 0.6 of a point payable up front, from 5.62 percent last week. That was well below the 6.89 percent average rate this time last year.

The 15-year fixed-rate mortgage fell to 4.84 percent, with 0.7 of a point up front, from 4.97 percent the prior week and 6.37 percent a year ago.

One-year adjustable-rate mortgages (ARMs), loosely indexed to the 10-year Treasury note, hit 3.67 percent, down from 3.74 percent last week. At the same time last year, the one-year ARM averaged 4.81 percent.

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"Continued reaction to last week's Federal Reserve Committee statements about the threat of deflation has triggered a rally in the bond market, driving long-term yields to the lowest level since 1958," said Frank Nothaft, Freddie Mac's chief economist.

"The Producer Price Index for April, released today, showed a considerably larger decline than had been expected, reaffirming market concerns about the state of the economy. However, the Consumer Price Index for April that will come out tomorrow will give us a much more comprehensive picture of what is actually happening."

If you're looking to take out a mortgage, will you choose a fixed or an adjustable rate? CNNfn's Valerie Morris reports on how you can save money by picking the right one. Play video (QuickTime, Real or Windows Media)

Freddie Mac's average mortgage rates are based on a survey of 125 lenders nationwide. The rates include those on mortgages accepted by borrowers with good credit ratings who place a 20 percent down payment on their homes, according to Freddie Mac. The total amount of each mortgage considered for the survey doesn't exceed a $322,700 limit.

Freddie Mac (FRE: down $0.05 to $59.75, Research, Estimates), or Federal Home Loan Mortgage Corp., is a publicly traded company the government established in 1970 to provide a flow of funds to mortgage lenders. It buys mortgages from banks, bundles them and then resells them as mortgage-backed securities.

Its products, and the products of other similar entities, have become increasingly popular as an alternative to government-backed bonds, particularly with international investors.