While agency loans have rates remaining in the mid-sixes, one broker is turning to portfolio lenders for lower rates
After watching mortgage rates stay stagnant or rise for much of 2025, rates have finally begun to slide, with the 30-year rate reaching its lowest point of the year on Thursday.
Rates have reached the mid-sixes, and while that is a welcome break from the low-sevens that brokers were looking at earlier in the year, there are loan types outside of Fannie and Freddie that are even lower.
Damon Germanides (pictured top), a mortgage broker and co-founder of Insignia Mortgage, said that, in addition to wholesale lenders, he works with some banks and credit unions that have offered strong rates, which have beaten what Fannie and Freddie loans are seeing.
“The tailwinds seem to be that in mortgage, we’re hearing, more and more banks that have been on the sidelines and credit unions and people we deal with that have candidly not been lending very much,” Germanides told Mortgage Professional America. “They're maybe getting some runoff. They’re more comfortable with the direction of the Fed, so they're trying to get ahead of it now.
“We were seeing pretty sharp pencil-type pricing from banks now. We're seeing some banks coming in under mid-fives on rates. I've got one small credit union under 6% on a 30-year. That's good, really good. So that's portfolio loans. The Fannie Freddie types of loans are still mid-sixes on rates, but that's better than it was, to be honest.”
Being small and nimble
Working with banks and credit unions is something that smaller brokerages use to their advantage, if you can find the right partners to work with, Germanides said.
“The challenge on that is finding the lenders that want to work with you,” he said. “The one thing about Insignia is it's a boutique operation. A larger mortgage bank platform with hundreds of loan officers, they can't support loan volume for that kind of profile. That's where being smaller and more nimble is advantageous.
“With a 10-person office, you can go develop a relationship with that kind of institution, and they're like, ‘Yeah, so long as you don’t overdo it, because we're not looking to do 100 loans a month.’”
In addition to potentially finding good rates at banks and credit unions, certain non-QM loan products have seen rates dip below agency rates. One of those loan types is a jumbo loan.
“I just got some news, even the mortgage banks, there's some prime product coming out with jumbo coming in under 6%,” Germanides said. “I think we're headed to an under 6% environment on jumbo loans. Fannie Mae, probably above six still.”
Germanides works with numerous high-end clients, and he believes they will be able to secure even better rates through private banks.
“The really well-to-do clients with lots of liquidity and other benefits to the bank, through the private banks, probably under 5% is where I think we're going to go,” he said. “Hopefully I'm wrong, and rates go down even further. But that’s not my base case. I think we're in a world of the 10-year treasury, like 4% to 5% still.”
Still some headwinds
While Germanides has seen some tailwinds in the mortgage market, there are still challenges to overcome, especially in California.
“These places don’t have a lot of new construction, new supply coming on,” he said. “Recent supply still remains very challenging, because people are married to their mortgage now. In some instances, they say it's their best asset. The loans become their best asset. And then just the high prices still in these areas, although we are seeing some signs of prices coming in a little bit, but maybe not enough to motivate your buyers.”
It's been a challenging year in California, which started with wildfires that have led to insurance price increases and additional affordability challenges in a market already among the most expensive in the United States.
John Walkup, co-founder of UrbanDigs, says this fall could be make-or-break for non-luxury homebuyers as mortgage rates and headlines keep many on the sidelines.https://t.co/jn5sTWp5HZ
— Mortgage Professional America Magazine (@MPAMagazineUS) August 28, 2025
“There's just a lot going on here,” Germanides said. “You've got the cumulative effect of inflation. We know about these insurance issues in fire zones, hurricane zones, tornado zones, and flood zones. It's all gone up. So, it is not inexpensive to own a home here.
“That's all putting pressure even in the market that we focus on more. Even in the more affluent markets, candidly, people are feeling it a little bit. All of that combined is in the headwinds.”
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