Home Buying

Here's how much Massachusetts borrowers could save, according to a LendingTree report — with some caveats.

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Nearly one in three homeowners who took out a 30-year fixed-rate mortgage between 2023 and 2025 could save an average of $2,320 a year by refinancing – a month ago. That’s according to a new Lending Tree analysis, based on April rates of 6.23%, before mortgage rates crept back up. 

Since the outbreak of the war in Iran sent oil prices higher and inflation back up, hopes for Federal Reserve rate cuts have faded, sending mortgage rates climbing. 

After dipping below 6% in February, the average 30-year fixed rate has now risen to 6.51%, edging closer to the 7% loans many borrowers locked in between 2023 and 2025. 

Still, if geopolitical tensions ease and rates fall again below 6%, the report suggests an even larger share of homeowners could benefit from refinancing. 

“There’s still real opportunity for a lot of Americans today, even at the rates that we’re seeing now,” said Matt Schulz, LendingTree chief consumer finance analyst. “It is certainly worth crunching the numbers on.”

Schulz noted that refinancing comes with costs and can take a month to six weeks. 

The report found that New Hampshire led the nation, with 42.5% of borrowers during the 2023 to 2025 period who could see a benefit from refinancing at 6.37%. Most of the others were midwestern states. But borrowers in higher-cost states could see the largest individual savings from refinancing.

Massachusetts No. 5, with the average monthly savings for borrowers from 2023 to 2025 at $246.

Elsewhere in New England:

Connecticut: $202

New Hampshire: $201

Rhode Island: $198

Maine: $170

Vermont: $160 

“There are a whole lot of families in Massachusetts who would like to have an extra $250 a month on top of their budget, so it’s certainly worth thinking about,” said Schulz. 

Leader Bank President Jay Tuli agrees, saying, “There’s still an opportunity… It’s just a little different.”

Between January and April, the bank saw a spike in the number of people looking to refinance their 30-year fixed-rate mortgages. But once it started to tick upwards in May, it stopped. However, Tuli said there is still a real opportunity for those with adjustable-rate mortgages. 

An adjustable-rate mortgage is a variable-rate home loan with an interest rate that remains fixed for an introductory period (three, five, seven, or 10 years) before adjusting periodically based on market indexes. Nationwide, Bankrate reports the initial five-year rates average at 5.81%, with others remaining close to 6% or lower. 

Tuli said that adjustable-rate mortgages taken out during COVID are coming due and resetting, creating a potential opportunity for borrowers. However, this applies only to a few loan holders, with the vast majority having 30-year fixed-rate loans, and it’s a big question when rates will fall back down. 

“The main story is that oil prices are very high, inflation numbers are increasing, and so the market is predicting that the Fed may have to increase rates, so that is pushing long-term rates up a little bit,” said Tuli. 

If there is a conclusion to the war, it appears that this will reverse, he said. 

However, Tuli said that’s a “big ‘if,’ also a when, and nobody knows.”