With new homebuyers and current homeowners clamoring to capitalize on low mortgage rates, one might think that homeowners would be acutely aware of what their actual rate is.
However, people — like mortgage rates — are not always reasonable. So, perhaps it may not come as a shock that more than a quarter (27 percent) of mortgage holders do not know what their current interest rate is, according to a new survey by Bankrate, a consumer financial services company.
“The bottom line is if you don’t know your rate, you may be missing out on the opportunity to cut your monthly mortgage payment, the biggest item for most homeowners,” the study points out.
To conduct the survey, Bankrate commissioned polling company YouGov Plc. to survey 2,602 adults, 1,394 of which were homeowners, and 803 of which are currently paying a mortgage. YouGov Plc. polled respondents online from January 15 to 17.
Bankrate.com
Although about one third of respondents reported they’re paying 3.99 percent interest or less — the lowest range measured in the survey — the average interest rate among respondents was 4.41 percent, 0.71 percent more than the current average rate for a 30-year fixed-rate mortgage.
Therefore, about 7 in 10 mortgage holders are either paying above the national average or don’t know what their mortgage interest rate is.
“Given the decline in mortgage rates we’ve seen over the past year, many qualified homeowners would stand to benefit, or save, by refinancing,” Mark Hamrick, Bankrate’s senior economic analyst, said in a statement.
Bankrate also polled homeowners about how many more years they planned to stay in their current primary residence, whether or not they were planning to remodel and how they would pay for their home remodel. The vast majority of respondents, 56 percent, reported that they didn’t plan to ever move out of their home. The second highest response to this question was the 19 percent of respondents who said they planned to move out of their home within the next one to five years.
Out of the 43 percent who plan to stay in their current homes forever, members of older generations, unsurprisingly, dominated: 73 percent of the silent generation and 63 percent of baby boomers said they have no plans to move, while only 42 percent of millennials said the same.
Bankrate.com
Most homeowners, even those not considering moving, are thinking about remodeling their current home. Sixty-three percent of respondents said they were likely to remodel or renovate their home in the next five years, with a majority stating they’d use savings to fund these projects.
In the long term, maintaining awareness about your mortgage and your home could save you a significant amount of money that might be put to better use somewhere down the line — like on that renovation project, for instance.