Over a Third of Americans Don’t Know Mortgage Rate

By Douglas A. McIntyre Published Feb 3, 6:38AM EST

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While most Americans likely know their shoe size or age of their children, over a third do not know the interest rates of their mortgages. These people are more likely to care what their mortgage payments are, and what portion of their monthly budget this represents. Also, the cost to refinance to get a lower payment has its risks.

According to a study by a mortgage research company:

Just over one-third of mortgage borrowers (35%) aren’t completely sure of the interest rate they are paying, according to a new Bankrate.com report. That includes an alarming one in seven mortgage holders who are “not too confident,” “not at all confident” or simply have no idea.

The same organization’s management says the ignorance might have negative consequences:

“Your mortgage rate is one of the most important numbers in your financial life, and there’s a good chance that one of your neighbors has no idea regarding how much he or she is paying,” said Holden Lewis, a senior mortgage analyst at Bankrate.com. “Given how far mortgage rates have fallen, these people could be missing substantial opportunities to save money by refinancing.”

For many homeowners, perhaps the option is dangerous — financially. There are substantial costs to refinance mortgages, and many Americans may not qualify because of credit scores.

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Bankrate warned against the refinance option, according to its own research posted less than two years ago:

According to Bankrate’s 2012 closing cost survey, the national average for closing costs on a $200,000 loan was $3,754. The fees in the survey don’t include taxes, insurance or prepaid items such as prorated interest or homeowner association dues.

Also:

For example, if your monthly payment goes down by $157, it would take 24 months of lower payments to recoup the average closing costs. Bankrate’s refinancing calculator lets you input your costs and the loan terms to calculate the months it will take to recoup your costs.

In theory, mortgage rates are important, financially. They do not rise and fall as rapidly as gasoline prices or the price for a cup of coffee. However, at least a gallon of gas or cup of coffee is not expensive enough that it matters.

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.