Homeowners who refinanced last year cut interest rates on 30-year mortgages by an average of 2.20 percent, the Federal Home Loan Insurance Corp. reported last week.
More than two-thirds of all borrowers reduced their monthly payments, a survey of 740,000 Freddie Mac loans across the country showed.
During 1986, the last major year of refinancing, homeowners reduced rates by an average of 2.60 percentage points.
The latest survey showed 83 percent of borrowers refinancing 30-year mortgages ended up with lower payments, while 94 percent of homeowners refinancing into adjustable-rate mortgages wound up with lower payments -- both records.
But other borrowers chose instead to shorten the maturity of their mortgages, leaving them with higher monthly payments.
Those borrowers included homeowners refinancing into 15-year, fixed-rate loans or into 30-year, fixed-rate mortgages from low-rate, adjustable mortgages.
Still, half the borrowers who took 15-year loans got lower monthly payments.