Copyright The New York Times
Now that mortgage rates have declined closer to 6 percent, a growing number of homeowners may benefit from refinancing. But does it make sense for you? The vast majority of homeowners with mortgages still have more enviable rates in the fives or lower. But at least four million borrowers could potentially shave 0.75 percentage points off their current rate by refinancing at prevailing rates, according to data from ICE Mortgage Technology. And there are about 1.7 million homeowners who are particularly well positioned: These people have rates of 6.92 percent or higher, credit scores of 720 or more and at least 20 percent of equity in their homes; taken together, that means they can save roughly $334 monthly, on average, by refinancing now. Here’s what you’ll need to consider. How Mortgage Rates Work The average interest rate for 30-year fixed mortgages was 6.22 percent on Thursday, according to Freddie Mac, up slightly from 6.17 percent last week and 6.79 percent a year ago. After reaching more than 7 percent at the start of the year, rates have generally been on the decline, particularly in the last several weeks, driving the number of refinancings higher. Mortgage rates do not move in lock step with the Federal Reserve’s changes to the so-called federal funds rates (the rate that banks charge one another for overnight lending), but they are influenced by them. Instead, mortgage rates largely track the yield on 10-year Treasury bonds, which are driven by a variety of factors, including the outlook for inflation, the economy and investor sentiment. Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times. Thank you for your patience while we verify access. Already a subscriber? Log in. Want all of The Times? Subscribe.
