LAURENCE Fink, chief executive officer of BlackRock Inc, the largest publicly traded United States money manager, said the US government's proposed troubled asset relief plan will make more mortgages available to home buyers and speed an economic recovery.

"There's no question," Fink said. "If you have a pool of capital offering to buy assets that may have been stuck in banks' balance sheets and can't be sold, the presumption will be that the institution has the ability to reduce leverage, which many will do, or if their leverage ratios are fine, they will make new loans."

The plan, announced by Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben S. Bernanke, calls for moving distressed mortgage securities off companies' balance sheets and selling them through a government entity, freeing banks to lend more.

The average fixed interest rate on a 30-year mortgage rose to 5.86 percent from the earlier 5.78 percent, according to Bankrate Inc, a financial services Website based in North Palm Beach, Florida.

US home values have fallen 18.8 percent since their July 2006 peak, according to the S&P/Case-Shiller Home Price Index. The average interest rate on a 30-year fixed-rate mortgage fell to 5.78 percent last week, with an average 0.6 point, compared with 6.34 percent a year ago, according to Virginia-based Freddie Mac.

"We could have a 30-year fixed mortgage rate below 5 percent," Fink said. "That helps the consumer with an adjustable-rate mortgage to refinance and have a better financial position because of the lower interest rates and the uncertainty of the adjustable rate," Bloomberg News reported.

Mortgage applications are the most important statistic to chart the recovery from the worst housing decline since the Great Depression of the 1930s, Fink said. Applications rose 58 percent in the week before last from their low in the week of August 15, according to the Mortgage Bankers Association.