Rate-and-term refinance applications have increased sharply as borrowers who took out adjustable rate mortgages during the pandemic era seek to lock in fixed rates before their adjustment periods begin. Many of these borrowers originally chose ARMs when fixed rates were historically low but now face potential rate resets at higher levels.
Mortgage servicers are proactively contacting eligible borrowers to discuss refinance options, recognizing that retaining customers through refinance is preferable to losing them to competitors. The average savings for borrowers converting from expiring ARMs to current fixed rates is approximately $180 per month.
