Dan Green over at The Mortgage Reports does the math on mortgage rates. We all know that they’ve been going down like a [insert metaphor here]. But Green shows just how much a difference even a year makes.

“Last February,” he writes, “the 30-year fixed rate mortgage averaged 5.05 percent nationwide.” Today they’re at an average of 3.87 percent.

Sez Green:

If you’re among the many U.S. households that bought or refinanced a home around that time, refinancing to today’s rates at 3.87 percent would lower your mortgage payment by 13%.

Saving 13% saved on your mortgage payment is huge. Take a look at the math:

  • February 2011 : $539.88 principal + interest for every $100,000 borrowed
  • February 2012 : $469.95 principal + interest for every $100,000 borrowed

That’s $69.93 monthly savings for every $100,000 borrowed. 

For a modest $200K home, that’s $140 a month — depending on your circumstances that could be life-changing (or just two family trips to the movies).