Refinancing applications at 15-month high

NEW YORK (CNNMoney.com) -- Applications for mortgage refinancing hit a 15-month high last week as interest rates remained near historic lows, a mortgage bankers' group said Wednesday.

The refinance index surged 17.1% in the week ended Aug. 13, compared to the prior week, the Mortgage Bankers Association said in a weekly report. As a result, the association's refinance index reached its highest point since the week ended May 15, 2009.

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The association credited interest rates close to historic lows for the rush to refinance. The average rate for a 30-year mortgage is about 4.5%, according to Freddie Mac, compared to about 5.2% one year ago, or 6.5% two years ago.

So someone who bought a house two years ago could shave two percentage points off their rate by refinancing. On a $200,000 mortgage, a home owner with a 6.5% loan pays $1,264 a month. At a 4.5% refinance rate, they would pay $1,013, saving $251 per month.

Applications for new purchase mortgages were down 3.4% in the latest week. The surge in refinancing requests pushed the association's composite index up 13%.