You couldn’t miss a headline about record-low refinance rates, especially in the latter half of 2020. But low interest rates didn’t necessarily translate into massive refi interest.
Zillow surveyed more than 1,300 homeowners who did not move over the past year (as of late April) to find out what motivated those who did refinance their mortgages, how much they saved by doing so, and what’s holding others back. According to the data, less than a quarter of homeowners refinanced their mortgages during the last year.
Some 37 percent of those who did not refinance reported that they were considering moving or paying off their mortgage soon, while 38 percent said fees were too high. Zillow reports another 29 percent of homeowners did not refinance because they reported that they don’t understand the process.
For those who did refi, about half say they cut their monthly payments by at least $300, according to the survey. Another 18 percent saved more than $500 per month, while 8 percent report not seeing a monthly savings.
About 89 percent of homeowners who refinanced in the past year said low interest rates were a reason they refinanced, and nearly 74 percent refinanced to reduce monthly expenses. About a third of homeowners who refinanced did so to pay off debt.