Demand for refinance loans are on the rise and have been for many months now. And for those can qualify to refinance, the savings can be very significant as interest rates are at ultimate rock bottom. In fact according to the Freddie Mac quarterly Refinance Report,  roughly half of all those who refinanced during the first quarter of 2009 saw a decrease in their annual mortgage interest  by 20 percent or more. That works out to be an interest rate reduction of about 1.25 percentage points.

 “Mortgage rates for conventional conforming 30-year fixed-rate loans reached 50-year lows in the first quarter of 2009 in Freddie Mac’s Primary Mortgage Market Survey®, and averaged just 5.06 percent over the quarter with 0.7 points. With mortgage rates this low many people were able to make their mortgage payment a lot lower,” noted Frank Nothaft, Freddie Mac vice president and chief economist. “The payment savings from ‘rate-and-term’ refinancing done during the quarter is about $160 a month on a $200,000 loan and in aggregate this adds up to about $2.5 billion in extra spending cash in the pockets of those homeowners to spend over the coming year. If this pace keeps up for the rest of 2009, that will provide homeowners about $10 billion in mortgage-payment savings during the first year after refinance.”

He added that “we expect refinance activity to be very high in the near term. These programs make it possible for borrowers with current loan-to-value ratios of up to 105 percent to qualify for a refinance that until recently they may not have been able to do.”

And mortgage blog refinancingcondo.com recently spelled out how you can benefit from the new Obama refinance plan if you are looking to cash in on these savings. Here’s how the plan can help you, according to that site:

“-Refinancing or modifying a home mortgage would be easier and more streamlined for all homeowners.

-Help homeowners who have seen their property value drop by 15% or more as a result of this mortgage crisis.

-Help homeowners who are facing foreclosure or defaulting on their mortgage by allowing them to refinance their home mortgage into a fixed rate 4.5% home mortgage.”

Now’s the time to refinance if you can. You are not likely to see rates get any lower any time soon and the savings can be phenomenal!