"It's lack of awareness of the opportunity, and how to act on it," added Graboske.
How much does that translate into on a monthly payment? More than 3 million borrowers could save $200 a month or more; nearly 1 million could save $400 a month or more. Mortgage refinance applications have increased in the past two months, but millions of borrowers are still sitting on the sidelines, perhaps unaware of the savings, or just too lazy to go through the process.
"There are costs that come into play for sure and there is often the perception of costs," said Graboske. "Still, if you look at this population, we have 1.5 million borrowers that are sitting at almost a full point above what they could be."
Black Knight broke borrowers up into rate clusters and found that about 3.4 million borrowers had active 30-year mortgages and interest rates of 4.5 percent to 4.75 percent. Of these, 1.5 million met broad-based underwriting criteria, and would be impacted when rates moved from 4 percent to 3.75 percent. When you look at the 4.25 percent to 4.5 percent rate range, 4.7 million had active 30-year mortgages, 2.1 million of which met underwriting criteria. They become "in the money" if rates drop from 3.75 percent to 3.5 percent.
Mortgage rates did move slightly higher in the past week, but not enough to change most of the analysis here. Millions of borrowers are still choosing to pay more than they have to on their home loans. That opportunity is likely to vanish in coming months, should rates rise as expected. Of course, last year most expected mortgage rates would already be far higher than they are now, and that did not materialize.