When John and Goldie Oliver learned they could cut the life of their mortgage in half and pay just $25 extra a month, they jumped at the opportunity.

The Olivers-a Broken Arrow, Okla., couple with three children and another on the way-are refinancing their 30-year mortgage with 15-year debt, taking advantage of a two-month plunge in interest rates that drove home loan rates to 17-month lows last week. Over the life of the loan, they'll wind up saving about $116,860 because they refinanced.

"We wanted a shorter-term, lower-interest rate loan that we could pay down in the next six to seven years," said Mr. Oliver, a 39-year-old swimming pool contractor. "If we pull it all off, I'll probably be able to retire at age 50."

Tens of thousands of U.S. homeowners each week are taking out new mortgages and refinancing old ones. Homeowners are refinancing at triple the rate of this time last year.

"Managing your debt is, for many people, one of the most important aspects of financial planning," said Ray Ferrara, a certified financial planner at ProVise Management Group in Clearwater, Fla. "Given that rates are as low as they are, it would make a great deal of sense for people to refinance if they have significant debt."

This week, homeowners are borrowing at average rates of 7.64% for 30- year mortgages, 7.25% for 15-years, and 5.90% for one-year adjustable-rate loans, according to preliminary figures from BanxQuote Inc., which gathers information on consumer lending.

Although rates have gone up during the past few days, homeowners are still refinancing old mortgages at the fastest pace since February 1996, according to the Mortgage Bankers Association of America.

"I can't even leave my office right now," said Greg Huber, president of Apollo Mortgage Inc. in Portland, Oregon. "I've just been answering refinance questions since rates have come down."

The Olivers took out their home loan five years ago at a rate of about 11%. Since then, the value of their property rose and their credit standing improved.

Once interest rates dropped, they were able to slash the rate on their $65,000 loan to 7.125% and shorten the life of the mortgage. The extra $25 they will spend each month is a small price for having the home paid off early, Mr. Oliver said.

Many homeowners decided to refinance after the 30-year mortgage rate dipped below 7.5% in early July.

"Anytime you get lending rates below 7.5%, it really starts stoking the fire for refinancing," said Steve Admire, president of Tulsa-based Advantage One Mortgage, which brokered the Oliver loan. The company fielded about twice as many customer calls on refinancing in July as in June, he said. "It's on everybody's mind now."

Refinancing may be a money-saving proposition for more than one-third- about $1.2 trillion worth-of the nation's outstanding loans, said Dale Westhoff, a mortgage prepayment analyst at Bear, Stearns & Co. If rates drop one-third of a point more, about 40% of loans outstanding will be expensive compared with getting a new loan, he said.

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