Refinances push up overall mortgage applications

Housing plan
studiopure / Shutterstock

Mortgage applications increased 0.8% in the week ending Dec. 18, the Mortgage Bankers Association (MBA) reported Wednesday.

Refi requests grew 4% from the previous week, and were up a remarkable 124% versus the same week last year. Refinance loans now account for 74.8% of all mortgage applications, up from 72.7% last week.

Rates for 30-year fixed-rate mortgages lingered near the MBA survey’s record low last week, edging up to 2.86% from last week’s 2.85% — but that’s still a full percentage point lower than at this time last year.

"Mortgage rates were little changed this week as markets digested the authorization of a second coronavirus vaccine and $900 billion stimulus package,” says chief economist Danielle Hale. Moderna’s vaccine was approved by the Food and Drug Administration, and Congress at long last approved a new COVID aid bill.

Haven't refinanced yet? There's still time

Two kids look out window of home in winter
Romrodphoto / Shutterstock

More than 19 million mortgage holders could save an average $308 per month by refinancing now, according to mortgage technology and data provider Black Night.

Assuming you have a solid credit score and at least 20% home equity, you can nab these ultra-low rates while they’re still available.

Though rates have been dropping steadily since the coronavirus lockdown began back in March, waiting for even lower rates could backfire.

Just last month rates spiked when drugmakers began sharing encouraging news about COVID vaccines, before falling back to new all-time lows.

Instead of trying to “time the market”, lock in low rates while you can. The closing process can take time — it took an average 59 days to close a refinance loan in November, up two days from the month before, according to the mortgage technology company Ellie Mae. By locking the rate your lender quotes you, the interest on your loan is guaranteed, usually for 30 or 60 days.

If you do miss out on the lowest rates, you might need to explore other ways to save on housing costs. When it’s time to buy or renew your homeowners insurance, get quotes from several companies to get the lowest price for the coverage you need.

Low rates are gifting buyers with good deals

Man and Woman Unpacking Near Our First Home Welcome Mat, Moving Boxes and Plant.
Andy Dean Photography / Shutterstock

Applications for new mortgages — called “purchase loans” — decreased 5% last week, the MBA says, but were still 26% higher than during the same week a year ago.

"There are still signs of relative strength in the housing market as 2020 ends,” says Joel Kan, the MBA’s forecaster. “However, housing affordability will be worth monitoring next year.”

Demand for homes remains strong, according to weekly market data from, and that hunger for houses is pushing listing prices higher. But even with a 12.7% jump in prices over last year, low mortgage rates are generating savings for buyers.

“Buyers of the median-priced home still save $3 to $4 per month on their principal and interest payments,” says’s Hale. “Put another way, if today's median-home buyers faced last year's mortgage rates, they'd have to fork over an additional $148 per month.”

Whether you’re looking to buy a home or refinance an existing mortgage, shop around to get the lowest rates. When you compare a minimum of five rate quotes, studies show, you can save thousands of dollars over the life of your loan.

About the Author

Ethan Rotberg

Ethan Rotberg


Ethan Rotberg is a staff reporter at MoneyWise. His background includes nearly 15 years as a writer, editor, designer and communications professional. He loves storytelling, from feature writing to narrative podcasts. His work has appeared in the Toronto Star, CPA Canada and Metro, among others.

You May Also Like

Current Mortgage Rates in 2021

Finding a favorable interest rate doesn’t have to be complicated.

What Is a Mortgage?

Yes, a mortgage is a big deal, but it's probably not as complicated as you think.

How to Get a Mortgage: Follow These 9 Steps

It's a lengthy, complicated process, so just keep your eyes on the prize: your new home.

9 First-Time Homebuyer Tips

For newbies entering the market, it definitely pays to know what's coming.