The vast majority of home loan refinances helped consumers keep their mortgage debt levels the same or aided their decline, according to mortgage data from Freddie Mac.
More than 80 percent of homeowners who successfully refinanced their home loan were able to keep the same loan amount or lower it during the third quarter. The figure was only slightly less than the record of 85 percent, recorded during the final three months of last year, the report noted.
Approximately 55 percent of those who refinanced had their balances remain the same. However, nearly 30 percent actually cut down the balance.
"On average, borrowers who refinanced reduced their interest rate by about 1.7 percentage points," said Frank Nothaft, vice president and chief economist for Freddie Mac. "On a $200,000 loan, that translates into saving about $3,500 in interest during the next 12 months."
Many consumers who refinanced likely were influenced by the low mortgage rates available, as well as other indicators in property data. Freddie Mac's Primary Mortgage Market Survey showed the 30-year fixed-rate mortgage was 3.39 during the week ending November 1, which was two basis points lower than the previous week.