The lowest interest rates in 20 years have caused an explosion in home refinance loans, but there has not been a big rush on home purchase loans, at least so far, Southland lenders report.

The Federal Reserve Bank cut the discount rate, the interest rate the Fed charges banks, to 3.5 percent on Dec. 20, the lowest rate in 20 years. In turn, banks lowered interest rates and consumers can now get a 30-year, fixed-rate mortgage with an interest rate of between 8 percent and 8.5 percent.

The day after the Fed cut the rate, Countrywide Credit Industries Inc., saw phone inquiries increase from 1,500 a day to 3,000 or 4,000 a day, said Jerry Baker, managing director of the Pasadena-based mortgage banker. "We have everybody who can answer a phone answering a phone," Baker said.

Most of the inquiries have been about refinance loans, Baker said. Countywide was offering an 8 percent interest rate on a fixed, 30-year mortgage. With that rate, a typical homeowner paying an 11 percent interest rate could reduce payments from about $1,000 a month to about $800 a month, he said.

Countrywide, had its biggest month ever in December with $1.4 billion in loan volume, Baker said. In mid-1991, Countywide was doing an average loan volume of $500 million to $600 million a month, he noted.

"We are beginning to see an increase in purchase transaction applications," Baker said. But it will take 30 to 60 days for lenders to see a real increase, he explained, because home buyers must first find their dream house before they apply for a purchase loan, he said.

There are some calls from homeowners who will not be able to benefit from a refinance loan because they bought their property in the last two years and it has dropped in value, Baker said. But most people qualify.

"Every lender I know has, well, I won't say more calls than they can handle, but a lot of calls," Baker said.

Requests for refinance loans and loan volumes were up in December at Beverly Hills-based Great Western Financial Corp., the second-largest savings and loan in Los Angeles County, said Sam Lyons, senior vice president of mortgage banking at Great Western. "Our loan volume has increased month by month since the beginning of 1991," Lyons said.