NEW YORK (CNN/Money) - Mortgage rates set another record low as they fell for the sixth straight week on signs that the Federal Reserve may cut interest rates to stave off deflation, lender Freddie Mac said Thursday.

The 30-year mortgage sank to an average 5.34 percent in the week ending May 23, with an average of 0.7 of a point payable up front, from 5.45 percent last week. That was well below the 6.81 percent average rate this time last year.

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The 15-year fixed-rate mortgage fell to 4.73 percent, with 0.7 of a point up front, from 4.84 percent last week and 6.28 percent a year ago.

One-year adjustable-rate mortgages (ARMs), loosely indexed to the 10-year Treasury note, hit 3.61 percent, down from 3.67 percent last week. At the same time last year, the one-year ARM averaged 4.85 percent.

"Long-term bond yields dropped leading up to Federal Reserve Chairman Greenspan's testimony to Congress over speculation of what he may say about deflation and over the possibility of the Federal Reserve buying long-term Treasury bonds to fight it," said Frank Nothaft, Freddie Mac's chief economist.

"With mortgage rates continuing to slip, a new wave of refinancing has appeared. According to the Mortgage Bankers Association of America, applications for refinance jumped 15 percent last week, near the record high set in March. And according to Freddie Mac's quarterly refinance review, the average age of a refinanced loan fell to 1.9 years in the first quarter of this year."

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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 $0.48 to $59.57, 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.