An estimated 2.4 million borrowers with Federal Housing Administration (FHA) loans can lower their mortgage costs by refinancing.
This is a result of the FHA reducing its insurance premiums in late January, according to a Housing Finance Policy Center at the Urban Institute study.
FHA has reduced its annual mortgage insurance premiums by 0.5 percentage points, which is expected to save the average borrower $900 per year.
The reduction is encouraging borrowing. Government-backed FHA loans spiked 76.5 percent immediately after it took effect.
Borrowers can save money by refinancing if the new mortgage rate and the new FHA premiums represent at least a 0.75 percent reduction in annual mortgage costs, the study found.