Zillow estimates that by refinancing, the average homeowner could save nearly $30,000 over the life of the loan.
According to a recently published Zillow report, rates on home loans are still hovering at all-time lows. This means that those homeowners who have not yet taken the plunge and refinanced their home loans are missing out on big savings. Zillow points to these potential savings as being in the thousands. Specifically, Zillow reports that the average monthly payment for a typical American home (one that was worth $256,663 during August) would be $951 (this before taxes or insurance) when paired with a 3.75% interest rate (which is what the going rate was about a year ago at this time). Fast forward to now, with the current rate hovering a 3.02%, and that estimated monthly payment drops significantly, down to $868. When all is said and done, Zillow breaks this down to reveal nearly $1,000 in savings.
Zillow further reveals that throughout the lifetime of a 30-year loan on this same hypothetical, average American home, the difference in costs accrued and paid between the (former) 3.75% rate and the current going rate of 3.02% end up at an impressive $29,880. Zillow economist Matthew Speakman offered his professional insight on the current market, specifically regarding what’s happening with a rise in refinancing: “Choosing whether to refinance your home loan is ultimately a personal choice, but recent moves in interest rates have probably made that decision a whole lot easier for those who qualify. Rate declines have allowed many to lower their monthly payment or tap into the equity they've built in their home by refinancing their loan–offering some financial stability to many in a time of great economic uncertainty. With rates poised to stay relatively low for the immediate future, for many–including those paying mortgage insurance–a refi could remain a worthwhile endeavor."
Source: DSNews