Millions were in the money to refinance, yet most stayed on the sidelines
Roughly one in five US homeowners with a mortgage were “in the money” to refinance this year, as average rates hovered a little above 6%. Yet only about 9% of those eligible actually locked in a new loan, according to a new Redfin analysis.
More borrowers finally moved above 6%
Redfin estimated that 19.8% of outstanding US mortgage debt carried a rate at least 50 basis points above prevailing levels – the highest share in more than four years and nearly triple the 7% share a year earlier.
The firm also said about 21.2% of homeowners had rates above 6% by the third quarter of 2025, after two years of elevated borrowing costs. Redfin estimated that $223 billion was refinanced in the first quarter versus a potential $2.24 trillion.
The math could be compelling. A borrower who bought a $500,000 home in October 2023 with a 20% down payment at 7.8% faced a monthly payment near $3,700, Redfin’s example showed. Refinancing that loan at 6% would have cut the payment to roughly $3,200 – a $500 monthly saving – with typical closing costs recouped in under two years.
At the same time, Freddie Mac’s Primary Mortgage Market Survey put the average 30‑year fixed rate just under or around 6% in late February, the lowest level since 2022.
Take‑up rate lagged past booms
Despite that, Redfin estimated only 9.1% of “in‑the‑money” homeowners refinanced in the first quarter, the weakest take‑up rate since early 2020.
During the pandemic refinance wave, roughly one in 10 eligible borrowers refinanced in a typical quarter, and more than half eventually did so as 30‑year fixed rates sank below 3%.
By contrast, today’s eligibility pool is smaller and more cautious, even as the Mortgage Bankers Association’s latest weekly survey showed refis making up about 58% of applications amid the recent rate dip.
“For homeowners who are in the money, refinancing now could meaningfully lower monthly payments and total interest costs over the life of the home loan,” said Bill Banfield, chief business officer at Rocket.
“Even a modest rate reduction can add up to big savings, helping free up cash, build equity faster, or better weather future financial uncertainty. Homeowners may also consider whether refinancing could have advantages other than putting money back in their pocketbooks every month. For instance, they could consider consolidating debt or changing their loan type. Some people take advantage of lower rates to change the length of their loan and pay it off faster while keeping essentially the same monthly payment.”
What the refi gap meant for originators
Industry voices warned that a refi window would open quickly once rates broke lower. Last year, Nationwide Mortgage Bankers president Michael Brennan told Mortgage Professional America that “at a 6% rate, there’s potentially 5 to 6 million refi opportunities out there, which is incredible,” urging brokers to prepare so they could lock borrowers in short‑lived dips.
More recently, lenders pushed for “mortgage check‑ups” and proactive reviews, arguing that volatility makes it harder for consumers to track when a refinance might pencil out.
For originators, the Redfin numbers underscore a stubborn gap between eligibility and action. It also serves as a reminder that the next leg of refinance demand may hinge less on where headline rates settle and more on who helps seasoned borrowers do the math in time.
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