Yesterday, according to Freddie Mac’s Primary Mortgage Market Survey®, the average rate on a 30-year mortgage was 3.47%. While up slightly from last week’s 3.5-year low, today’s rates are just 16BPS above all-time lows.
This brings the number of high-quality refinance candidates to approximately 11.3 million. On average, these borrowers could save $266 on principal and interest payments each month via a refi, for an aggregate potential monthly savings of $3 billion.
More than 3.3 million can save $300 or more on their monthly mortgage payment by refinancing into a new 30-year fixed loan, while nearly 1.1 million could save upwards of $500 per month.
Black Knight defines refinance candidates as 30-year mortgage holders with a maximum 80% loan-to-value (LTV) ratio and credit scores of 720 or higher, who could shave at least 0.75% off their current first lien rate by refinancing.
It should be noted that our LTV and credit score assumptions are conservative by design and that there are refi products on the market available for borrowers with even higher LTVs and/or lower credit scores.
Disregarding our broad-based eligibility criteria, there are actually some 22M mortgage-holders who are “in the money,” with current interest rates at least 0.75% above today’s rate – the largest the population has been on record outside of a week in September 2019 when rates also dipped below 3.5%.