A record number of people have refinanced their mortgages during the past year in a move that likely lowered their monthly housing payments and could influence future tax deductions.

With mortgage rates at four-decade lows, the interest that homeowners pay likely will be reduced under the new loans they have secured. Millions of consumers have been able to lower their average monthly payments -- sometimes by several hundred dollars.

The Internal Revenue Service is reminding taxpayers that some portions of their refinancing costs may be tax deductible.

Some of the points paid to secure the mortgage often can be itemized on an individual's income taxes. For example, the points paid in a refinancing can be deducted over the life of the loan. Points paid to get an original home loan can be deducted during the year they were paid.

Mortgage bankers sell points on loans that allow customers to buy down the interest rate that will be paid over the life of the loan. Generally, 1 point equals 1 percent of the loan amount and often will lower the market interest rate by between one-eighth and one-quarter of a percentage point. So paying 1 point on a $200,000 loan would cost $2,000 and lower a market interest rate of 6.25 percent to between 6 percent and 6.13 percent.

"A good rule of thumb is asking whether you will be recouping the expense of the points within three to 3 1/2 years of the loan," said Al Ingraham, a mortgage banker and regional vice president for First Horizon Home Loans in Timonium.

In a refinanced mortgage, your tax deduction can be calculated by dividing the points you paid by the number of payments you'll make over the loan. For example, 1 point paid on a $200,000 loan would equal $2,000. On a 30-year loan, a homeowner would be eligible to deduct $5.56 a month or $66.72 a year, according to the IRS. If you bought the home, you would be eligible to deduct $2,000 in the year that you paid the points.

If some of the refinanced money is used to renovate the home, a portion of the points paid can be deducted in the year they were paid.

Those who have refinanced a second time often can write off the points they paid for the first mortgage when that loan is paid at settlement.

Other costs and fees affiliated with a refinancing such as appraisals and credit reports typically are not tax deductible.

Since the amount of interest paid over the course of the loan will decline, homeowners will have less interest to deduct on future income tax returns. It's one of the few downsides to refinancing at a lower rate, some tax advisers said.

But most experts said the interest savings typically outweigh the tax implications. And they said many people who refinance will find themselves paying more interest at the beginning of the new loan, meaning the tax deductions could be greater at first. "The refinancing is going to change it around," Ingraham said of the tax consequences. "But a lot of people discipline themselves and take the savings and apply it to the principal."

Making one extra payment a year on a 30-year mortgage often cuts six years off the loan, he said.

Mortgage rates have hovered near 6 percent for a fixed, 30-year loan this year. Those figures, the lowest in three decades, have pushed millions of homeowners to consolidate their loans and refinance at lower rates. That has given them access to more money and has helped keep a stalling economy afloat.

The Mortgage Bankers Association expects a record $2.42 trillion in mortgage loans to be secured this year. Fifty-eight percent of those loans will go to refinancing, the group estimates.

Doug Perry, first vice president for the consumer markets division of Countrywide Home Loans Inc., said most consumers focus on three things before refinancing:

Securing the lowest monthly payment

Knowing how quickly the loan can be repaid

Identifying the potential tax breaks

"You should consult a tax adviser," Perry said.

For more information about refinancing costs and what is eligible for a deduction, check the IRS Web site at www.irs.gov.