Larger Share of Americans Tapping Home Equity When Refinancing
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.
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