By Leslie Cook
When determining whether it’s the right time to refinance, homeowners need to weigh the costs of refinance against the benefits. While this can seem daunting, it does not have to be a difficult task.
The truth is that millions of homeowners can still benefit from a mortgage refinance.
Current mortgage rates are hovering around 3%, higher than at the start of 2021 but still close to historic lows. At current rates, there are around 11.2 million well-qualified homeowners who could lower their mortgage interest rate by at least 0.75 percentage if they decided to refinance today, according to mortgage data company Black Knight.
Together, these homeowners could save an aggregate of $3.1 billion per month, or about $279 per owner per month. That’s a potential savings of $3,348 per year. About 1.2 million of these owners could save up to $500 per month, for yearly savings of $6,000.
These borrowers — as well as those who can reduce their interest rate by less — will need to decide if these savings justify closing costs.
With the potential savings, it’s worth taking the time to review your options and see if a refi is the right move. We’ve covered the basics to help you decide.