By refinancing at market rates seen in early April 2026, nearly one-third of those who obtained a 30-year, fixed-rate mortgage between 2023 and 2025 might save an average of $2,320 per year., according to recent LendingTree data. To determine how many borrowers had rates at least a half-point higher, analysts compared individual mortgage rates discovered in government-collected mortgage data from those three years to 6.37%, the average rate for a 30-year, fixed-rate mortgage in early April.
Fortunately, an estimated 32.5% met that requirement. Even better, some 56.6% of people would profit from refinancing—a 24.1 percentage point increase—if mortgage rates dropped to 6.00%, substantially in line with levels observed prior to recent geopolitical tensions.
Both the percentage of debtors who potentially benefit from refinancing between 2023 and 2025 and their overall potential savings vary greatly by state. Nonetheless, it is noteworthy how many Americans could be able to save a significant amount of money during a period of rising costs and unstable economic conditions.
Refinancing potential by origination year (based on 6.37% rate):
| Year of original mortgage | % with rates ≥0.50 pts above 6.37% | Average monthly savings | Average annual savings |
|---|---|---|---|
| 2025 | 25.1% | $152 | $1,822 |
| 2024 | 34.7% | $191 | $2,291 |
| 2023 | 37.7% | $223 | $2,680 |
| 2023-2025 | 32.5% | $193 | $2,320 |
Note: The analysis includes originated home purchase loans for primary residences with 30-year terms.
Waiting Until Rates Drop May Come at a Cost
According to Freddie Mac, the average interest rate on a 30-year fixed-rate mortgage in early April 2026 was 6.37%. LendingTree looked at borrowers whose interest rates were at least half a point higher than that rate as potential refinancing prospects.
The question was posed: Why just a half-point? The answer is simple: refinancing is not cheap. It usually costs 2% to 6% of the loan amount, or $8,000 to $24,000 on a $400,000 mortgage. A half-point reduction usually lowers your monthly payment sufficiently to help you recover those upfront costs in a fair amount of time. Consumers can save a lot of money by refinancing, but if it takes so long to break even on the initial fees that they never realize significant savings, there’s little sense in it.
According to Freddie Mac, the average rate on a 30-year fixed-rate mortgage in the U.S. was roughly 7.79% in October 2023, the highest since November 2000. But since then, mortgage rates have decreased, which is good news for those looking to buy a new house. When LendingTree conducted this study in early April 2026, the average interest rate on a 30-year fixed mortgage was 6.37%, which was about 1.5% less than the peak in 2023.
Refinancing becomes a feasible option when rates drop that much, giving individuals who purchased at the higher rate an opportunity. Knowing this, LendingTree examined mortgage data to determine the proportion of borrowers between 2023 and 2025 who could benefit. It was discovered that 32.5% of borrowers who obtained a 30-year mortgage during that time could profit if they refinanced at that 6.37% rate. Data showed further that the possible savings came to $193 every month, or $2,320 a year.
You are more likely to profit from refinancing if you took out a loan earlier. Some 37.7% of individuals who made purchases in 2023 did so at rates that were at least half a point higher than the 6.37% rate. They might save $223 a month. Although the savings are still substantial for those groups, that is a much better situation than 2024 borrowers (34.7% might gain at an average of $191 per month) and 2025 borrowers (25.1% at $152).
Although the drop in mortgage rates from 7.79% to 6.37% is significant, rates were significantly better for a short period of time, the study found. For the first time since September 2022, the average rate on a 30-year fixed mortgage dropped to 5.98% on February 26, 2026. After being on the sidelines for a number of years, it generated headlines and probably encouraged at least some people to return to the home market. Sadly, it only remained below 6.00% for one week. Soon after, the war in Iran started, which caused rates to rise sharply for a few weeks in a row. Before falling to the 6.37% rate we included in this research, they peaked in the first week of April at 6.46%.
Rates can still fluctuate, even on a weekly basis. We examined the number of borrowers from that 2023–2025 window who may profit from refinancing if interest rates dropped to 6.00% as part of our analysis. In that scenario, we discovered that 56.6% of recent purchasers may profit, which is 24.1 percentage points greater than at 6.37%. Among borrowers in 2024, that percentage rises to 59.9%.
Note: The analysis includes originated home purchase loans for primary residences with 30-year terms.
Nationwide Refi & Borrower Trends
There were significant differences in the percentages of recent borrowers who could benefit from refinancing at 6.37% when examining the data at the state level. In certain instances, one state’s contribution was around twice that of another. With 42.5% of borrowers at that time who could benefit from refinancing at 6.37%, New Hampshire tops the country. Midwestern states dominate the top 10, with Illinois and Indiana following closely behind (both at 42.4%).
Top 10 states with the highest share of recent borrowers that could save by refinancing:
| Rank | State | % of 2023 borrowers who could benefit | % of 2024 borrowers who could benefit | % of 2025 borrowers who could benefit | % of 2023-25 borrowers who could benefit |
|---|---|---|---|---|---|
| 1 | New Hampshire | 48.4% | 47.2% | 32.8% | 42.5% |
| 2 | Illinois | 44.3% | 46.9% | 35.5% | 42.4% |
| 2 | Indiana | 49.9% | 44.1% | 33.4% | 42.4% |
| 4 | Michigan | 49.9% | 44.0% | 31.4% | 41.8% |
| 5 | Ohio | 47.0% | 44.9% | 32.6% | 41.4% |
| 6 | Maine | 46.8% | 42.6% | 31.1% | 39.9% |
| 7 | Missouri | 47.1% | 42.0% | 29.6% | 39.5% |
| 8 | Wisconsin | 45.7% | 39.8% | 29.0% | 37.9% |
| 9 | Minnesota | 42.1% | 41.6% | 28.8% | 37.4% |
| 10 | New Jersey | 40.4% | 40.1% | 30.7% | 37.2% |
Conversely, only 20.0% of Alaska’s recent borrowers may profit by refinancing at 6.37%, which is less than half of the percentage at the top of the list. South Dakota (22.8%) and North Dakota (21.7%) do not do much better. Similar to the top 10, a large number of the bottom 10 states are grouped together, including some of the Dakotas’ neighbors.
The list appears somewhat different when drop rates are lowered to 6.00%. In that scenario, Michigan has the highest percentage of recent borrowers who could benefit from refinancing (70.5%), followed by New Hampshire and Illinois (both 68.8%). The lowest rates in the US, 6.00%, might benefit just 41.8% of recent borrowers in North Dakota.
Top 10 states by percentage of recent borrowers who could benefit from refinancing at 6.37%:
| Rank | State | % of 2023 borrowers who could benefit | % of 2024 borrowers who could benefit | % of 2025 borrowers who could benefit | % of 2023-25 borrowers who could benefit |
|---|---|---|---|---|---|
| 1 | Alaska | 27.8% | 19.3% | 13.2% | 20.0% |
| 2 | North Dakota | 28.5% | 22.1% | 14.8% | 21.7% |
| 3 | South Dakota | 30.4% | 23.4% | 15.1% | 22.8% |
| 4 | Idaho | 29.5% | 26.8% | 16.7% | 24.0% |
| 5 | Hawaii | 28.4% | 28.7% | 21.1% | 26.0% |
| 6 (tie) | Utah | 32.4% | 26.9% | 19.6% | 26.1% |
| 6 (tie) | Iowa | 32.7% | 26.9% | 18.8% | 26.1% |
| 8 | Wyoming | 33.6% | 28.3% | 19.0% | 26.7% |
| 9 | Texas | 32.5% | 28.4% | 20.4% | 27.2% |
| 10 | Alabama | 34.8% | 28.2% | 19.2% | 27.3% |
There were considerably more variety in the potential savings from refinancing when we dug further into the state-level data than we did in the proportion of borrowers who may profit. Borrowers in some states could save over three times as much as those in other places.
It should come as no surprise that some of the most costly states in the country have the greatest potential savings. The average monthly savings for Californians was $363, followed by Hawaii ($355), the District of Columbia ($273), Washington state ($259), and Massachusetts ($246). Potential savings of at least $200 were observed in 17 states overall.
Iowa borrowers may save $110 per month at the bottom of the list. Though context is crucial, that is less than one-third of what borrowers in California and Hawaii could save. An additional $110 a month would have a significant impact on the majority of families in the nation. Their monthly financial margin for error would be much increased, potentially enabling them to allocate more funds to debt repayment, emergency fund building, retirement savings growth, or other financial objectives. West Virginia ($112), Ohio and Indiana ($123), and Arkansas ($125) join Iowa at the bottom of the list. Again, not quite as much as in some other states, but still significant savings.
Millions of homeowners who purchased in the last few years may now have a chance to significantly lower their monthly expenses, even though mortgage rates are still higher than they were during the recession. For individuals who bought while rates were close to their peak, even modest rate reductions can result in significant savings. However, refinancing isn’t a universally applicable option. Before contemplating a move, borrowers must consider upfront expenses, the length of time they intend to stay in their house, and the amount of money they can save. Overall, the potential savings shown in this analysis indicate that monitoring rates might be quite beneficial for many.
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