More than 1 in 5 homeowners who stayed put during the pandemic opted to refinance their mortgages over the past year, according to a new survey published by Zillow.
The Seattle-based real estate tech company found that roughly half of those who refinanced last year saved at least $300 per month by doing so. Still, many homeowners declined to refinance because of the difficulty of the process or the high fees involved, Zillow’s survey found.
“Homeowners who have recently refinanced ranked the process as less difficult than getting a divorce or following a strict new diet, but significantly tougher than training a puppy,” the company said in a June 23 news release.
Those who did refinance were overwhelmingly interested in capitalizing on low interest rates to reduce their monthly expenses, Zillow said. One-third of those who refinanced said they used it as an opportunity to pay off debt.
Nearly 60 percent of respondents said they have refinanced the loan on their current home at least once in the past. But only a fraction of these respondents did so in the last year, when interest rates reached historically low levels before bouncing back a bit in recent months.
In many cases, those who did not refinance recently said they were likely to move or pay off their loan in the near future. Roughly the same share of respondents who opted not to refinance — 38 percent — said that high fees were giving them pause.
Another chunk pointed to the complexity of the refinancing process. This group amounted to 29 percent of those who didn’t refinance in the last year.
Despite these reasons for hesitancy, Zillow found that nearly half of those who did not already refinance recently are considering doing so in the next year.
“There are a lot of benefits to refinancing a home right now,” Zillow Home Loans Senior Director Jonathan Lee said in the release. “Reducing monthly mortgage payments is extremely popular. It can boost borrowers’ monthly cash flow by lowering the amount of interest being paid on their loan.”
ZG Population Science conducted the survey for Zillow, basing its results on a survey of 1,359 homeowners who have a mortgage and did not move in the past year. The firm also interviewed an additional 242 homeowners who refinanced in the last year to improve the accuracy of its comparisons across groups.