Fast-rising interest rate have caused a dramatic drop in the number of homeowners who can benefit from mortgage refinances.

Black Knight, an information and mortgage technology provider, reports that the average interest rate for a 30-year fixed loan increased by more than 50 basis point since this year. Accordingly to Black Knight the refinance pool has dropped to 5.9 million. It is about 11,000 lower than the rate at the beginning of 2019 and approximately 20,000,000 by 2020.

Black Knight refers to refinance applicants as 30-year mortgage owners with maximum 80% loan/value ratio and credit scores above 720. Refinance could save them at least 0.75 percent on their existing first lien rate.

According to the Mortgage Bankers Association, this has resulted in half of all mortgage applications for refinances to home loans being declined compared to a year earlier. Although the impact of this is huge on loan volume, it also has a negative impact on consumer spending as potential borrowers are losing out on any savings they could use to buy other things.

Because rates are so low, and have been hovering at record lows for so many years, it is possible that borrowers didn’t feel the urgency to refinance. They might have thought that rates would drop further. In the two-year period, almost 18 million homeowners have refinanced. This volume won’t hold at higher interest rates.

Andy Walden of Black Knight, vice president for enterprise strategy and research, stated that 2022 refi volumes will surpass those from the previous six years.

“Black Knight had already been tracking a shift to an equity-centric refinance market; these latest rate increases have simply accelerated that phenomenon,” he added.

Due to the steep rise in house prices, today’s homeowners have a huge amount of equity. On average, they have gained $45,000 in equity over the past year. $50,200 in housing wealthThe National Association of Realtors says that it’s a reasonable estimate.

Even with the latest rate hike, 5.9million borrowers still have the opportunity to save significant amounts on a refinance. This could be approximately $275 per borrower per month or an overall monthly saving of $1.6 trillion. With current rates, over a million of these borrowers would save $400 per month and 6611,000 could get $500 savings.