A new survey from home valuation and real estate listing company Zillow revealed that just 22% of homeowners refinanced their mortgages over the past 12 months.

While that might sound like a decent percentage, it comes at a time when mortgage rates have never been lower.

Zillow pointed out that 30-year fixed mortgage rates dropped from around 3.13% a year ago to an all-time low of 2.65% in January of 2021, before rising slightly.

In other words, a lot of folks are missing out on real savings by opting to stick with their original home loans, which may feature substantially higher interest rates.

As for why, Zillow found three main reasons why these individuals chose not to refinance, despite the possibility of saving hundreds each month.

The Fees to Refinance Are Too High

While refinancing does have the potential to save a homeowner hundreds of dollars or more each month, it doesn’t always make sense.

One reason why is the associated fees, aka closing costs, which can add up enough to make a marginal improvement in interest rate a lot less compelling.

As for a rule of thumb when refinancing, I believe everyone should take the time to do their own math to determine if it’s worth it, instead of relying on a blanket rule.

This was actually the number one reason why the 1,300 homeowners polled by Zillow did not refinance in the past 12 months, cited by 38% of respondents.

One way to avoid the uncertainty is to simply go with a no cost refinance, in which most or all fees are covered via a lender credit.

While you’ll wind up with a slightly higher interest rate in exchange for the convenience, it provides flexibility if you choose to sell your home or refinance again in the near future.

Speaking of fees, not all lenders charge them, so put in the time to shop as well to alleviate your concerns on this front.

Nearly 40% of Homeowners Considering a Move or a Payoff

The second most cited reason why borrowers didn’t refi was due to a potential move or outright payoff.

For example, a homeowner might be considering a sale with the market so hot right now, though I don’t know where these people will go next unless they already own multiple properties.

Or have the flexibility to move to another state where home prices are a lot lower.

Simply put, it doesn’t make a lot of sense to go through the refinance process if you’ve already got one foot out the door.

As noted, mortgage lenders and the many third-party companies involved charge fees to refinance.

It’s also a time-consuming process, and one that’s often compared to other unpleasant experiences like going to the dentist.

Grouped with this reason was the thought of a total payoff of their outstanding lien(s). So instead of a refinance, simply paying the whole thing off.

Of course, with mortgage interest rates so low these days, and inflation expected to skyrocket, why rush to pay off the mortgage?

The Rest Don’t Understand the Refinance Process

The final reason why more homeowners haven’t refinanced was simply because they didn’t understand the process.

About 29% of homeowners provided this as a reason why they stood pat on their existing home loan, which clearly isn’t a good excuse, especially if you’re leaving thousands of dollars on the table annually.

At the end of the day, a refinance isn’t as easy as say applying for a credit card, or leasing a car, but it’s fairly straightforward.

And if you put a little bit of time into better understanding the process, you can eliminate a lot of the aggravation and guesswork.

Truth be told, there aren’t many other ways to lower your monthly bills so substantially than via a rate and term refinance.

So even if it doesn’t go well, or takes longer than expected, the return on investment could still be second to none.

It’s also your duty as a homeowner to continuously monitor long-term interest rates in case there are money-saving opportunities.

Ultimately, a mortgage is not a set-it-and-forget-it form of financing, even the 30-year fixed.

It should be noted that while just over a fifth of homeowners refinanced recently, more than half (59%) of those surveyed have refinanced their current mortgage at least once.

As to why homeowners refinanced in the past year, nearly 9 in 10 (89%) cited low interest rates, and nearly three-quarters (74%) refinanced to reduce their monthly expenses.

Roughly a third did so to pay off other debts, such as student loans, credit cards, and so on.

With regard to monthly savings, about 29% of those who refinanced saved $300-500 per month, 18% saved more than $500 per month, and nearly half (45%) saved less than $300 per month.

The remaining 8% did not see monthly savings, which could be attributed to a cash out refinance where the loan balance grows.

Read more: How soon can I refinance my mortgage?