by Kamran Rosen
Interest rates have been at all-time lows for years, but millions of people who could qualify for reduced mortgage rates through refinancing haven't taken the plunge. About 6.68 million homeowners across America could collectively save a total of $20 billion annually. California is the state with the most potential refinance savings, according to a state-by-state analysis provided to NerdWallet by Black Knight Financial Services.
The data, based upon a broader analysis released Monday in the company's January Mortgage Monitor report, calculated the number of potential refinance candidates and their possible savings. Black Knight defined candidates for refinance as those with a credit score of at least 720 who had at least 20% home equity and a 30-year fixed mortgage rate at least 75 basis points, or 0.75%, above the Feb. 18 average 30-year fixed rate of 3.65%.
Other top states for savings include Florida, New York and Texas, where residents miss out on a total of at least $100 million in savings a month by not refinancing. California had the highest total potential savings at just under $300 million a month and the fourth-highest individual savings at $328 per homeowner per month.
Smaller states see higher averages
Higher total savings were found mostly in states with larger populations. Smaller states such as Connecticut, Hawaii and Massachusetts, as well as Washington, D.C., all made the top 10 for average potential savings per homeowner, with Hawaii topping the list at $437. This likely stems from higher real estate prices. States that placed in the top 10 in both total and individual savings were California, New Jersey, New York and Virginia.
Most states maintained roughly the same amount of individual potential savings from three months ago, although D.C., Montana and New York saw such savings rise by at least $20 a month. Iowa remained the state with lowest potential individual savings, at $171 a month.
Total savings were calculated by multiplying the potential refinance candidates in a state by the average potential savings. All figures are monthly.
States where refinancing could save the most money: full data
Kamran Rosen is a data analyst at NerdWallet, a personal finance website. Email: kamran@nerdwallet.com.
This story originally appeared on NerdWallet.