Homeowners save $3.4 billion in mortgage payments by refinancing last quarter

08.03.09
By Nicholas Storie

Homeowners haven't had much to cheer about lately but a new report from Freddie Mac finds that Americans who refinanced their home loan during the second quarter of 2009 reduced their payments by 3.4 billion.

The quarterly refinance report also notes that half of homeowners who refinanced their mortgage saw their interest rates drop by at least 20 percent.

Freddie Mac's Frank Northaft said homeowners were helped by fixed-rate interest rates which hit a 50-year low during the second quarter of the year and 30-year fixed rate mortgages which reached record weekly average lows of 4.78 percent on two separate occasions in April.

"Fixed mortgage rates are still very low, although they have climbed up a bit from their April lows," he said. "We are anticipating more than one-half of originations to be for refinancing throughout the rest of the year as long as rates stay near their current levels of 5.25 percent."

But it would appear that the number of people looking to refinance has dropped in recent weeks with the Mortgage Bankers Association Refinance Index for the week ending July 24 falling 10.9 percent from the previous week.

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Homeowners saved money by refinancing last quarter