Most borrowers choosing fixed rates, the same loan term

Are homeowners really racing to pay off their mortgages with today’s low rates?

According to Freddie Mac’s recent survey of third-quarter activity, 29 percent of borrowers who refinanced during the third quarter of this year shortened their mortgage, approximately 68 percent kept their same loan term, and 3 percent chose to extend their loan term.

More than 95 percent of refinancing borrowers chose a fixed-rate loan.

“Compared to a 30-year fixed-rate mortgage, the interest rate on a 15-year fixed was about 0.7 percentage points lower during the third quarter,” said Frank Nothaft, vice president of Freddie Mac. “For borrowers motivated to refinance by low fixed-rates, they could obtain even lower rates by shortening their term.”