By Mortgage brokers news
Homeowners are more concerned with paying off their mortgage faster rather than looking for a stable monthly payment, making adjustable rate mortgages less popular these days, according to a quarterly report from Freddie Mac.
“While homeowners are choosing the comfort that comes with constant monthly principal and interest payments on fixed-rate mortgages, at the same time many borrowers are now looking at paying down their mortgage balances faster,” said Frank Nothaft, Freddie Mac chief economist.
The report, based on refinancing activity in the U.S., showed that 95 per cent of homeowners looking to refinance on an existing mortgage chose a fixed-rate mortgage, even if their previous mortgage was fixed or adjustable.
It also reported that one in four borrowers who were refinancing a 30-year fixed-rate mortgage either chose a 15 or 20 year fix to replace it, this being the highest percentage since 2004.
Stability though was evident in the numbers of homeowners who were refinancing an existing one-year adjustable rate mortgage; with results showing that 89 per cent of those moved to a 30-year fixed-rate setup.