Posted October 23, 2013Tweet
According to mortgage-backer Freddie Mac, U.S. homeowners who refinanced between July-September 2012 lowered their mortgage rates by an average of 31 percent.
It's the biggest one-quarter improvement in 27 years.
The average 30-year fixed rate mortgage rate averaged 3.54% last quarter, according to Freddie Mac.
The mortgage rate marks its the lowest quarterly average in the agency's 41-year history and, when considered against two other Freddie Mac facts -- the average refinanced mortgage rate was 5.25 percent, and had a median life of 5.6 years -- it's clear that U.S. homeowners are saving a metric-ton of money.
Consider a homeowner in the Philadelphia, Pennsylvania suburb of Gladwyne who, 5.6 years ago, borrowed from the bank at the local jumbo loan limit of $417,000. Today, he would save $586 per month.
That's a 25.5 percent mortgage payment reduction, on average, and the math works at all loan sizes.
For homeowners with underwater mortgages, Freddie Mac reports even larger monthly refinance savings.
Homeowners refinancing via the Home Affordable Refinance Program (HARP) refinance dropped mortgage rates 200 basis points on average, or 2 full percentage points. For the same borrower shown above, it's a 29% payment decrease.
HARP is available to homeowners with mortgages for which the note date is no later than May 31, 2009, and with a perfect mortgage payment history stretching back 6 months.
Mortgage rates remain low, propelling the U.S. Refinance Boom through its 4th year. Many U.S. households have refinanced at least once; some have refinanced three or four times using zero-closing products.
To see what today's low rates can do for you, and whether a zero-closing cost refinance is right for you, get started with a rate quote online.
The information contained on The Mortgage Reports website is for informational purposes only and is not an advertisement for products offered by Full Beaker. The views and opinions expressed herein are those of the author and do not reflect the policy or position of Full Beaker, its officers, parent, or affiliates.
Barry L. Systems Analyst
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2014 Conforming & FHA Loan Limits
Mortgage loan limits for every U.S. county,
as published by Fannie Mae & Freddie Mac, and the FHA.