Freddie Mac announced today that homeowners who refinanced their mortgages during the fourth quarter of 2012 were able to reduce their interest rates by an average of 1.8 percentage points. That works out to a 33% reduction of their interest rates, which is the largest reduction ever recorded by Freddie Mac.

As an example, a borrower with a $200,000 loan who refinanced saved approximately $3,600 in interest over the next 12 months. Freddie Mac also pointed out that fixed-rate mortgages were at record lows, with 30-year and 15-year rates averaging 3.4% and 2.7%, respectively.

Thirty-nine percent of those who refinanced were able to reduce their principal balance by paying extra money at closing, according to Freddie Mac. Meanwhile, borrowers who were able to refinance using the Home Affordable Refinance Program (HARP) had an average interest rate reduction of two percentage points.

Freddie Mac says HARP helped many homeowners who may not have been able to refinance obtain low interest rates and reduce their interest rates and monthly payments. This means they will be able to pay off their mortgages on time and, therefore, keep their homes.