Mortgage Refinance Applications Surge Nearly 60% as Rates Plummet to Lowest Level in Over a Year
Washington, D.C. – September 17,2025 – Homeowners rushed to refinance their mortgages last week as interest rates fell to their lowest point as October 2023,triggering a massive wave of applications. According to the Mortgage Bankers Association (MBA),refinance applications jumped a remarkable 58% compared to the previous week and are 70% higher than the same week last year.
The surge in activity pushed the refinance share of total mortgage applications to 59.8%, up from 48.8% the week prior.The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($806,500 or less) decreased to 6.39% from 6.49%, with points decreasing to 0.54 from 0.56, including the origination fee, for loans with a 20% down payment.
“Homeowners with larger loans jumped frist,as the average loan size on refinances reached its highest level in the 35-year history of our survey,” noted Mike Fratantoni,MBA’s SVP and chief economist.
Demand was notably strong for adjustable-rate mortgages (arms), with the ARM share of activity climbing to 12.9% of total applications – the highest level seen since 2008. Fratantoni clarified that these newer ARMs differ from those preceding the 2008 financial crisis,stating,”Notably,ARMs typically have initial fixed terms of five,seven,or ten years,so those loans do not pose the risk of early payment shock that pre-2008 ARMs did. Borrowers who do opt for an ARM are seeing rates about 75 basis points lower than for 30-year fixed rate loans.”
While refinance activity dominated,purchase applications also saw a modest increase,rising 3% for the week and standing 20% higher than the same week a year ago.
Mortgage rates continued their downward trend at the start of this week, dipping to 6.13% – the lowest level since the end of 2022, according to Mortgage News Daily. This move comes ahead of a potential interest rate cut by the Federal reserve on Wednesday. Though, analysts caution that a bond selloff following a rate cut, as occurred last year, coudl reverse the trend and push rates higher.
