ICE Mortgage Monitor: Refinance Eligibility Rises

(Image courtesy of Paparazzi Ratzfatzzi/pexels.com)

ICE Mortgage Technology, Atlanta, released its November Mortgage Monitor, highlighting that the recent dip in mortgage rates has significantly increased the pool of homeowners who could reduce their monthly payments via a refinance.

ICE defines highly qualified refinance candidates as those with at least a 720-plus credit score, 20% equity and potential savings of at least 75 basis points. That share rose to 1.7 million, the largest pool since early 2022.

Approximately 4.1 million would be defined as “in the money” for a refinance, which means they could save at least 75 basis points by refinancing at prevailing rates.

“The recent easing in mortgage rates has begun to open the refinance window for many borrowers, particularly those who originated loans in the past two years,” said Andy Walden, head of mortgage and housing market research at ICE. “At the same time, homeowners still have near-record amounts of tappable equity, and the cost to access that equity continues to improve. Together, these trends are creating meaningful opportunities for borrowers to leverage rate-and-term refinances and second-lien home equity products.”

The rate and refinance environment also pushed prepayment speeds to rise significantly in September and October.

HELOC interest rates are also falling. At the beginning of Q4, mortgage holders had $17.3 trillion in home equity, of which $11.2 trillion is tappable. The average mortgage holder has $204,000 available to borrow. The monthly cost to withdraw $50,000 in equity has fallen by more than $100.