The rates are almost shockingly low, near the all-time lowest-ever rates within the 50 years Freddie Mac has tracked average mortgage rate data. Just look at this week’s averages from the Primary Mortgage Market Survey. As you can see, the rates dropped week-over-week (WOW) and year-over-year (YOY) across all mortgages tracked by Freddie Mac:
15-Year Fixed-Rate Mortgage (FRM): 2.2%; -0.31 YOY; -0.06 WOW; 0.70 Fees / Points
30-Year FRM: 2.9%; -0.13 YOY; -0.08 WOW; 0.60 Fees / Points
5/1-Year Adjustable-Rate Mortgage (ARM): 2.52%; -0.50 YOY; -0.02 WOW; 0.20 Fees / Points.
Many homeowners have already benefited from the pandemic era’s incredible refinancing rates. According to a May Freddie Mac Research Note, those who did refinance during 2020 won an average interest rate reduction of greater than 1% and scored savings averaging greater than $2800.
Nonetheless, the Research Note revealed that there are still a large number of people who have not yet looked into refinancing and whom it would benefit:
An incredible 2 in 5 borrowers (40%) would yield substantial savings if they were to refinance their loan today.
For nearly half of Black and Hispanic borrowers, a refinance would yield $1200 of savings each year (see below).
Who would benefit from refinancing their mortgage now?
You would benefit from a refinance if you have a higher rate than what is currently available. The higher your original loan rate, the more you can save – and a higher rate typically applies to older loans.
To get a broader perspective, Freddie Mac reviewed historical mortgage data. Here is the average mortgage rate for three recent time periods:
2000-2008 — 6.17%
2009-2012 — 4.39%
2013-2019 — 4.21%
With today’s rates below 3%, clearly, refinancing NOW (before rates do start rising) makes sense for many.
Great refinancing benefits for Black and Hispanic borrowers
Freddie Mac broke borrowers into a few different ethnicities and races to determine the extent to which different groups could benefit from a refinance. It is eye-opening to look at how large the segments of the population are that could save substantially with a refinance – particularly true for the racial/ethnic minority groups. See the percentages for three levels of yearly savings:
$2400+: 15% All; 20% Black; 19% Hispanic; 13% White
$1800+: 24% All; 32% Black; 31% Hispanic; 23% White
$1200+: 40% All; 49% Black; 47% Hispanic; 38% White
Get your best rate
With rates as low as they are today, it is easy to see why so many people can still benefit from a refinance. At Best Advantage Mortgage, we get to know you and your goals so we can save you money where it matters most. Apply now!