Mortgage interest rates are falling again, and that is good news for nearly 5 million homeowners who might be able to lower their monthly payment.
The average rate on a 30-year fixed-rate mortgage has tumbled to 4.06 percent — the lowest it’s been in more than a year. That means more than 4.9 million Americans could likely qualify for a refinance and lower their rate by at least 0.75 percent, according to Black Knight, a financial data and analytics company.
A CNBC report outlines the type of savings that are available to borrowers who refinance:
“On a $300,000 mortgage a refinance from 4.81 percent to 4.06 percent would save the homeowner about $133 per month. On a $600,000 loan, it would be twice that savings, or $267 per month.”
But it’s important to act fast. In the past week, the size of the population that can benefit from a mortgage refinance has increased by 50 percent, Black Knight says. But mortgage rates can change quickly. While they may continue to drift lower, they just as easily could zoom higher.
Getting the best refinance rate
Before seizing this opportunity to lower your mortgage costs, think through your own situation. As we note in “How to Refinance Your Home Loan,” a refinance to a lower rate does not always make financial sense:
“Refinancing to a lower rate lowers a monthly mortgage payment. But it only makes sense if the month-to-month savings exceed the cost of refinancing. In short, don’t do it unless you’ll stay in the home until you’ve saved more from the lower rate than you paid in refinancing fees.”
In other cases, you might want to refinance, but find yourself running into roadblocks. Even if you have good credit, lenders sometimes will give you the cold shoulder. To find out why, check out “Ask Stacy: Why Can’t I Refinance My Home?”
Have you ever refinanced your mortgage? Share what you learned in the process in comments below or on our Facebook page.