Mortgage interest rates have fallen to some of their lowest levels ever, providing the strongest evidence yet that it's time for homeowners to refinance -- and save some money.
The 30-year fixed rate mortgage is averaging around 4.3 percent, while the 15-year fixed fell to a record low of 3.5 percent amid falling bond yields and signs of a weaker-than-expected economy, according to Freddie Mac's Primary Mortgage Market Survey.
"It's fantastic news, because it will motivate anyone who's thinking about refinancing because they know that low rate won't last forever," said Michael Albano, president of Metropolitan Boston Real Estate.
Consider these savings: a homeowner with a mortgage of $250,000 at 5.5 percent would save $160 per month, $2,020 annually, by refinancing to a 4.32 percent loan. Such savings offer a guarantee of money in the bank at a time when traditional savings account returns are at or near 0 percent and the stock market's gyrations have depleted investment accounts.
"Anyone who refinances at these historically low rates is a definite beneficiary of concerns about the economy and the bleeding on Wall Street," said Greg McBride, senior financial analyst at Bankrate.com. "If you qualify for a new loan, this is a tremendous opportunity."
But Albano said that while these low rates are good news for mortgage holders who meet the credit and equity requirements for a refinancing, they may not get potential buyers off the sidelines.
"I doubt people who are fence-sitting will say, 'I wasn't ready to buy at 4.5 but at 4.3 percent, let's go,' " he said.