COLUMBIA -- Jeff and Anita Miller of Columbia are among Midlands residents refinancing their home after mortgage rates fell to their lowest level since the 1960s.
The Millers, a surgeon and nurse, plan to use the reduction of $300 per month to pay off student loans and build savings.
"It's a no-brainer," Jeff Miller said of taking advantage of the drop.
Bankers say home refinancing is booming after federal officials significantly slashed a benchmark rate last week.
Some lenders reduced their interest rate on home loans as much as 1 percent, making their rates lower than 5 percent.
"It's a gold rush of requests," said Leslie Francis, senior vice president at South Carolina Bank & Trust.
Home refinancing requests at her bank are double the level of a year ago, she said.
It's the largest volume she has seen in 20 years of experience with federal rate cuts designed to spur borrowing.
With home sales slow in a recession, the refinancing surge is a blessing for bankers who found little interest in loans recently.
"Refinancing activity is very big business right now," said Mark Tibshrany, a loan officer at Bank of America's offices in downtown Columbia. "Things were much quieter this fall than we were accustomed to."
The rate reduction came at the right time for University of South Carolina business professor Tom Moliterno.
He was eager to refinance before a variable interest rate kicked in for the loan on his home in the Heathwood neighborhood in Columbia.
"It was a matter of waiting until the time was right," he said. Part of the $200 monthly savings will go toward other bills and part will be invested.
Not everyone will be eligible for the lower rates, bankers caution.
Refinancing will be available for homeowners with good payment histories and decent equity in their residence, they said.
Banking analysts call the rate cut good news. But they say it's not a cure for an ailing housing industry.
"It is not a fix-all, especially for those in delinquency," said Rhonda Marcum, executive director of the Mortgage Bankers Association in Charlotte.
The lower rates also aren't likely to spur sales of new homes, analysts say not while people are insecure about their jobs.
But others say the rate cut is a good thing for homeowners who use the money to pay off debt or to save, instead of going on a spending spree.
Real estate agent Jay Graham warns homeowners not to fall into the trap again of "using their homes as piggy banks" to finance other purchases.
Pharmaceutical sales representative Claire Stoneburner is heeding that advice.
She intends to put the $120 per month reduction from refinancing the home she bought last spring in Columbia's Shandon neighborhood into savings.
"Any way we can, we're going to save, with the economy like it is," said the 25-year-old first-time home buyer. "We're definitely watching our budget."