According to a recent Zillow survey, fewer than a quarter of established homeowners refinanced their mortgages over the last year, even though about half of those who did say they cut their monthly payments by at least $300.
Zillow surveyed more than 1,300 homeowners who did not move over the past year (as of late April) to find out what motivated those who did refinance their mortgages, how much they saved by doing so, and what’s holding the rest back.
“In general refinancing a mortgage should be a bit less intense than a few weeks away at puppy boot camp,” said Jonathan Lee, senior director of Zillow Home Loans. “A few hours of online shopping, talking to a mortgage professional and signing documents is a small price to pay for hundreds of dollars in potential savings per month, and goes a long way toward funding those dog training classes.”
While more than half (59%) of those surveyed have refinanced the mortgage on their current home at least once, just 22% of respondents said they did so within the past year.
Mortgage rates have trended down since winter of 2018, and 30-year fixed rates dropped from 3.13% about a year ago to an all-time low of 2.65% in January of this year, according to the Freddie Mac Primary Mortgage Market Survey, which analyzes residential mortgage rate averages since 1971.
Though slightly above January’s record lows, rates are remarkably competitive — 2.93% as of June 17. Almost 9 in 10 (89%) homeowners who refinanced in the past year said low interest rates were a reason they refinanced, and nearly 3 in 4 (74%) refinanced to reduce monthly expenses.
Homeowners who have recently refinanced ranked the process as less difficult than getting a divorce or following a strict new diet, but significantly tougher than training a puppy.