Freddie Mac’s quarterly refinance analysis for the fourth quarter of 2013 shows borrowers continuing to take advantage of historically low mortgage rates to reduce their monthly mortgage payment and shorten their loan terms. According to the report, borrowers who refinanced in 2013 will save on net approximately $21 billion in interest over the next year. Frank Nothaft, Freddie Mac’s vice president and chief economist, said the refinance boom began to wind down as the pool of potential borrowers declined and mortgage rates increased during the second half of the year. According to Nothaft, the refinance share of total mortgage activity will fall further this year, as refinance demand drops and the emerging purchase market consumes a bigger piece of the pie. Also in the report, the average interest rate reduction in the fourth quarter was about 1.5 percentage points. On a $200,000 loan, that’s a $3,000 savings over the next 12 months. More here.