Applications for mortgages fell last week as the rush to obtain loans before an increase in federal insurance premiums subsided, the Mortgage Bankers Association reported Wednesday.

The MBA's Market Composite Index fell 5.6% from the previous week, driven by a 13.6% drop in Purchase Only applications and a 26.6% decline in in government purchase applications.

"Purchase applications fell last week, driven primarily by a sharp decrease in government purchase applications as new, higher FHA premiums went into effect," said Michael Fratantoni, MBA's vp of research and economics. "This decrease reverses a 20% increase in government purchase applications over a four week period, which was likely driven by borrowers attempting to beat this deadline."

The Refinance Index decreased 0.6% from the previous week. The unadjusted Purchase Index decreased 12.8% compared with the previous week and was 28.8% below the same week one year ago.

The four week moving average for the seasonally adjusted Market Index was down 2.4%. The four week moving average was down 0.8% for the seasonally adjusted Purchase Index and down 3.2% for the Refinance Index.

The refinance share of mortgage activity increased to 61.6% of total applications from 58.5% the previous week. The adjustable-rate mortgage(ARM) share of activity remained unchanged from the previous week at 6.5%.

The average contract interest rate for 30-year fixed-rate mortgages decreased to 4.80% from 4.83%, with points decreasing to 1.01 from 1.06. The rate for 15-year fixed-rate mortgages decreased to 4.03% from 4.07% with points decreasing to 0.96 from 1.02.