While the share of borrowers that cashed-out some equity has increased considerably over the past year, the refinance volume has also fallen sharply, resulting in a relatively small amount of equity cashed-out, to the tune of roughly $8 billion which is less than one-tenth of what we saw at the peak in mid-2006. That said, based on the analysis contained in our third quarter refinance report, we estimate that those that lowered their payment by refinancing into a cheaper mortgage rate will save more than $1.5 billion in interest payments over the next 12 months of their new loan. On average, that’s an interest rate reduction of about 1.3 percentage points – a savings of about 24 percent. On a $200,000 loan, that translates into mortgage interest savings on average of about $2,700 during the next 12 months.
Hover over the interactive charts below for the latest trends, or see the complete third quarter refinance report for all the details.
Want to receive our weekly blog round up? Subscribe at the right - and each Friday we'll send you our latest blog posts.
Have a comment or question about this post? Email us to let us know what's on your mind.