Freddie Mac released a report showing one half of borrowers who refinanced their conventinal mortgage in the 3rd quarter lowered the mortgage rate they were paying by 1.1 percent on average.

The collective dollar amount saved in the first 12 months of interest payment expenses by the home owners who refinanced their mortgages was $3 billion.

Looking for mortgage refinance rates? The best mortgage refinance rates can be found in your state by using our mortgage rate tables: Current Mortgage Refinance Rates

In the beginning of 2009 only borrowers who had enough equity in their homes were able to refinance but that changed for many borrowers who had their home loans owed by Freddie Mac or Fannie Mae.

A program called The Home Ownership Affordability Refinance Program which started in April 2009 allows homeowners who have a loan owed by Freddie Mac or Fannie Mae to refinance their loans even if they have no home equity.

As of August 31, 2009, 93,000 homeowners have taken advantage of the program and refinanced their loan with most of the refinancing taking place in July and August according to the Federal Housing Finance Agency.

Freddie Mac’s Refinance report also showed 64 percent of borrowers who refinanced a conventional  first-lien mortgage either kept about the same principal balance or reduced it. Borrowers are also refinancing loans without taking equity out, a big change from the past several years when the main reason people refinanced was to take money out.

Mortgage refinance rates are still very low so if you haven’t refinanced your mortgage yet, you should take advantage while interest rates are still low. You can use a mortgage calculator to figure out if refinancing makes sense for you. A general guideline is that the new mortgage rate should be at least one percent lower than your existing mortgage rate.

If you have an adjustable mortgage rate that will reset in the near future, you should probably refinance even if current mortgage rates are not one percent lower. Mortgage interest rates will head higher in the coming year, mainly because the recession is all but over and the Federal Market Open Committee will raise interest rates to keep inflation in check.

The Feds actions will drive mortgage rates higher, so take advantage of these low rates while you can. A possitive note about the Fed increasing rates is that will drive bank deposit rates higher, including CD rates and savings account rates.