June 16, 2016

HARP: Two Ways to Save

Act Now: HARP expires in 189 Days.

The Home Affordable Refinance Program (HARP®), a federal program launched in 2009, was designed to help homeowners who owe more on their mortgage than their home is worth take advantage of lower mortgage rates and other refinance benefits.

HARP enables borrowers with little to no equity to save in two ways:

  • Scenario A: Refinance at a lower interest rate to either reduce the monthly payment, or
  • Scenario B: Reduce the term of the mortgage to rebuild equity faster

How it works

Scenario A on a $200,000 loan: Lower interest rate = Lower monthly payment

YearAverage Interest Rate (30-Year Fixed-Rate Mortgage)Mortgage Payment


Scenario B on a $200,000 loan: Refinancing to a shorter term = Long-term savings*

YearAverage Interest RateMortgage PaymentLife of Loan Cost
20055.87% (30-year fixed-rate mortgage)$1,182


Today2.81% (15-year fixed-rate mortgage)$1,363**


In this instance, the homeowner could save $180,344 over the life of the loan: $129,450 from the lower interest rate and $50,894 from the shorter term.

  • * Your monthly mortgage payments may go up on when refinancing to a 15-year mortgage; however, you will realize significant savings through the interest rate reduction over the life of the loan.
  • ** This scenario does not factor in any principal that was paid down on the original $200,000 mortgage or adjustments in the home’s value. 

Get Started

More than 3.4 million families have already benefited from HARP and you could too.  If you are current on your payments and your mortgage is owned by Freddie Mac or Fannie Mae, get started now by following these steps:

  1. Determine if Freddie Mac or Fannie Mae owns your loan
  2. Check your eligibility
  3. Get prepared and call your lender
  4. Find a participating HARP lender