Cash-out refinancing at 15-year low

Dollar sign and house balanced on teeter-totter

There’s good news for homeowners still thinking about refinancing.

Freddie Mac’s quarterly refinance data released Monday show that homeowners who refinanced in April, May or June were able to improve their financial situations by lowering their interest rates by about a full percentage point.

At the same time, cash-out refinancing -- where homeowners withdraw equity from their homes by increasing their loan balance -- fell to a 15-year low, a reflection of the large decline in home values and the tightening of lending standards.

Most homeowners either maintained their principal balance (51%) or paid down their mortgage debt at closing to reduce their balance (26%). Less than a quarter (23%) increased their principal.

During the past 25 years, the average quarterly cash-out share in the mortgage refinance business has been 62%, according to Freddie Mac.

Homeowners in the second quarter took advantage of average rates as low as 4.5% on 30-year fixed-rate mortgages with 0.7 points and as low as 3.68% on 15-year fixed-rate mortgages with 0.7 points, according to Freddie Mac’s Primary Mortgage Market Survey.’s latest mortgage survey shows 15- and 30-year fixed-rate mortgages cost slightly more on average during the final week in July. Five-year, adjustable-rate mortgages fell to a record low.

Given these numbers all at or near their historic lows, now is still a good time to refinance as long as other important, individual refinancing considerations like the break-even period check out.

There’s no way to tell how long these low rates will last, or if rates could sink even lower, but homeowners who are holding out for something better should take a historical view.

Let’s not forget that throughout the 1980s, interest rates were in the double digits, climbing as high as 17.6% in February 1982.

Our database of mortgage rates can help you find the best deals in your area, including many that are less costly than the national averages.

You can use our mortgage calculator to determine the monthly payments for the exact amount you want to borrow with this or any home loan.

It will also provide a month-by-month amortization schedule that shows how much you've reduced your debt and how much you still owe if you want to pay off your mortgage.

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