1Q Refis Seen Reducing Payments
McLean, VA-Refinances tracked by Freddie Mac in the first quarter are on track to reduce mortgage payments by $2.5 billion in the coming year.
"The payment savings from 'rate-and-term' refinancing done during the quarter is about $160 a month on a $200,000 loan and in aggregate this adds up to about $2.5 billion," said Freddie Mac's chief economist and vice president Frank Nothaft.
Half of all borrowers who refinanced their loans during the period lowered their interest rate by at least 20%, according to Freddie.
The median ratio of the new-to-old mortgage rate was 0.80 in the quarter and this marked the lowest ratio since the third quarter of 2003.