Twenty-seven percent of mortgage holders do not know their interest rate, according to a new survey from Bankrate.
“Given that a home purchase tends to be the largest single item that we’ll ever make, this is need-to-know information,” says Mark Hamrick, Bankrate’s Senior Economic Analyst.
The survey polled over 2,000 Americans, with 1,394 of them being homeowners.
When asked what their current interest rate is, 37% of respondents said between 0% and 3.99%; 18% said it is between 4% and 4.49%; and 7% thought it was between 4.5% and 4.99%.
Eighteen percent of those surveyed thought the interest rates on mortgages was above 5%.
Bankrate said the average interest rate among mortgage holders in the survey was 4.41%, which is above the national average. Additionally, seven in 10 mortgage holders are either paying above or don’t know their mortgage interest rate.
“The reasons for this may include not being able to qualify for a better rate, being too far along in their payments for the cost of a refinance to make sense or simply not being aware of the situation,” Bankrate said.
Freddie Mac said Thursday that the average interest rate on a 30-year fixed-rate mortgage was 3.47%—a slight increase from the prior weeks 3.45%.
“With mortgage rates hovering near a five-decade low, refinance application activity is once again surging, rising to the highest level in seven years,” said Sam Khater, Freddie Mac’s Chief Economist. “This surge coupled with strong purchase activity means that total mortgage demand remains robust, reflective of a solid economic backdrop and a very low mortgage rate environment.”
Black Knight recently reported that more than 11 million homeowners are candidates for refinancing, with an average savings of $3 billion.
Also, 1.1 million of those homeowners could save $500 per month through refinancing.
“Given the decline in mortgage rates we’ve seen over the past year, many qualified homeowners would stand to benefit, or save, by refinancing,” Hamrick says. “With the prospective reduction in monthly payments, the savings could be better put to use including toward retirement or another worthy financial goal. Here’s where what you don’t know can hurt you, costing you money.”