Planning to refinance? Think fast

Rates jumped as much as three-quarters of a point Wednesday following a surge in interest rates on benchmark Treasury securities. By yesterday afternoon they had receded slightly, but many Boston homeowners are wondering whether they missed their chance at bargain-basement rates.

For instance, Tim and Kelly Maguire of Millbury say they are reconsidering whether it makes sense for them to refinance after the 5 percent rate they were quoted Monday jumped half a point by the end of the week. At 5 percent, they would have saved $300 a month - money they hoped to use for home improvements or a new car.

"I waited too long to start this process," said Tim Maguire, 30, adding that if rates go down again "you'll see people jumping in right away."

Michael Coppolino, 56, of Acton was shocked after his mortgage broker told him the rate he was quoted, 4.75, would jump more than half a point in a day.

"A half point change was beyond anything I could imagine," Coppolino said.

Local mortgage lenders say the have spent the past few days consoling customers and helping them decide whether to wait for rates to drop or to lock in. Interest rates for a 30-year fixed-rate mortgage have hovered around 5 percent since last December, after the Federal Reserve Bank said it would buy $600 billion in mortgages and mortgage-backed securities.

The relative stability of rates over past six months made this week's sudden increase all the more surprising to many people.

"Some people said, 'Well, give me the night to think about it,' and unfortunately at that point it is almost a bit too late," said Matt Scott, a manager at MBA Mortgage Corp. in South Boston. "You try to emphasize timing is everything."

Guy Cecala, publisher of Inside Mortgage Finance, said rates will likely dip again to 5 percent or below for a 30-year mortgage. And even if the returns of Treasury securities continue to rise, Cecala said, interest rates do not necessarily follow suit.

"The bottom line, it is not a good week to lock in a rate," he said. "I don't think there is any reason to feel everybody missed the boat."

But Brian Koss, managing partner at Mortgage Network Inc. in Danvers, a private mortgage bank, doubts rates will take any more record tumbles.

"I think if you can get a quarter [percentage point] below where you are today, you grab it," said Koss.

Brian McLaughlin, vice president of Loansnap New England Mortgages, said he was able to help most of his clients lock in low rates before Wednesday. But some held off, he said, hoping to reap more savings. Now he's telling them they could wait a few more days to see if rates go down again. But he also is advising clients to put this week's increase in perspective.

"Rates are still at historic lows, and if it makes sense to refinance, they should lock in," McLaughlin said.

Jenifer B. McKim can be reached at jmckim@globe.com.