Rate of maintaining or reducing debt at 26-year high

According to recently released results from Freddie Mac's fourth quarter refinance analysis, 85 percent of homeowners who refinanced their homes maintained or reduced their mortgage debt in the fourth quarter.

That number marks a 26-year high. Out of the borrowers used for the study, 37 percent maintained the same loan amount while 49 percent of homeowners who refinanced their homes reduced their principal balance.

"Savvy homeowners are taking advantage of some of the lowest fixed-rates in more than 60 years to lock in interest savings," said Frank Nothaft, Freddie Mac vice president and chief economist. "Fixed-rate mortgage rates hit new lows during December, with 30-year product averaging 3.96 percent and 15-year averaging 3.25 percent that month, according to our Primary Mortgage Market Survey."

Americans may reconsider packing up and moving to a more affordable home with the option of refinancing. The median interest rate reduction for a 30-year fixed-rate mortgage was close to 1.4 percentage points, which equates to savings of about 26 percent in interest rate.

According to a recently released report from Fitch Ratings, a sharp rise is expected in cost to service mortgage loans, which could have a significant effect on the housing market.