RISMEDIA, October 28, 2009—With mortgage rates reaching historic lows, Zillow Mortgage Marketplace reports a surge in refinance request activity within its free marketplace for custom mortgage quotes.
In the first half of October 2009, as mortgage rates dropped below 5%, consumer interest in refinancing soared. The number of refinance requests for the first half of October versus the first half of September increased by 39%, making up more than half (51%) of all consumer loan requests. This is up from the first half of September when refinance requests made up only 41% of all requests.
Current mortgage rates are significantly lower than they were just a few months ago. Today’s average 30-year rate of 4.9% is now 60 basis points lower (11%) than it was in June, when the 30-year fixed rate was at 5.5%, the highest level this year. That means that on a $200,000 loan (assuming a home price or value of $250,000), the monthly principal and interest payment would now be $1,064.42 versus $1,141.61 for the same loan in June, saving a borrower $27,788.40 over the life of a 30-year loan.
“Current low interest rates are a key factor in consumers deciding to refinance their existing loans or to buy a new home. Shaving just a fraction of a percentage point off an interest rate can mean saving thousands of dollars over the life of the loan. When rates drop to record lows- as they are now according to data from Zillow Mortgage Marketplace- we see homeowners move quickly to take advantage,” said Stan Humphries, Zillow chief economist. “But, as the Federal Reserve ramps down its purchase of mortgage-backed securities, I expect rates will rise somewhat by the end of the first quarter of 2010.”
For more information, visit www.Zillow.com.