Feb 13, 2012
Mortgage math: Refinance from a year ago and save big
13 Feb 2012
Posted by Andrew Kantor
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.
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).