With lower mortgage rates, is now the time to refinance your home?

SALT LAKE CITY — Falling mortgage rates have led to a surge of interest in refinancing.

Refinance applications are at their “highest level in two years,” the Mortgage Bankers Association said this week, as rates have dropped to their lowest levels in more than a year.

According to Mortgage News Daily, the national average for mortgage rates hovered around 6.5% as of Friday afternoon.

Lenders in Utah are noticing an uptick in refinancing interest.

“Refinance activity’s really increased substantially in the last little bit,” said Josh Kramer, who sits on the board of directors for the Utah Association of Mortgage Professionals. “There is a lot of people right now that would absolutely benefit from refinancing.”

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Leland Schuyler is one of them. In June 2023, he purchased a house in Payson at a rate of 7.25%.

“We knew going into it that we would be [refinancing] as soon as possible,” Schuyler told KSL TV, “and since the beginning of the week, it’s looking like now might be a good time to do that.”

Schuyler said he plans to pull the trigger soon, and based on current rates, he expects it will make a big difference in his budget.

“That would end up saving us several hundred dollars a month,” he said.

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However, just because mortgage rates have fallen doesn’t automatically make it a no-brainer to refinance. Kramer said for older loans with a lower balance, it might not be very helpful.

“But if I had a loan from last October and I could save 1%,” Kramer said, “I would jump on that all day.”

Another thing to consider when refinancing is the amount of upfront costs and how long it would take to break even.

But for many people right now, Kramer said, refinancing is “absolutely worth looking into.”