The blog of the Urban Institute
February 25, 2015

New interactive tool shows impact of various changes on FHA refinance volume

We recently estimated that roughly 2.4 million current Federal Housing Administration (FHA) borrowers could benefit from refinancing under the agency’s reduced Mortgage Insurance Premiums (MIP). The number of borrowers that could benefit, however, would go up or down depending on the mortgage rate. When we published the original blog post, rates for 30-year fixed-rate mortgages were at an average of 3.6 percent, but have recently increased slightly. To ensure the continued relevance of our estimate, we’re introducing a new interactive tool that will allow users to recalculate the number of FHA borrowers that would stand to benefit from refinancing at varying interest rates.

Our tool allows users to select a mortgage interest rate (from 3 to 5 percent) and FHA’s MIP (0.85 or 1.35 percent) to see how many borrowers could reduce their annual mortgage costs by refinancing with the chosen rates. We hope this tool will allow mortgage market participants to better understand how changing rates and premiums can affect refinance volume.


Interactive tool by Ben Chartoff and Tim Meko, Urban Institute
Photo: Shahid Ali Khan/Shutterstock


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