As rates dip, refinance retention reaches its highest level since 2022

A modest decline in mortgage rates in the third quarter is reopening parts of the refinance market, and more borrowers are staying with their current loan servicer when they refinance. In the December 2025 Mortgage Monitor, ICE Mortgage Technology reported that refinance retention reached 28% in Q3 2025, the highest level in about 3.5 years. Retention measures the share of borrowers who refinance and remain with the same servicer rather than switching.

For real estate professionals, the story behind the retention increase is practical: it highlights which homeowner cohorts are most rate-sensitive today and how quickly financing conversations can re-enter client decision-making when pricing improves.

What’s driving the increase

ICE Mortgages’ data indicates the recent pickup is being led by “rate-and-term” refinances among newer borrowers. The organization said rate-and-term refis accounted for 62% of all refinance activity in October—the highest share in nearly five years—and estimated that 95% of rate-and-term refis in September and October involved loans originated between 2023 and 2025. 

ICE Mortgage also reported that the average rate-and-term refinancer carried a $505,000 balance and a credit score around 762, and lowered their mortgage rate by 0.92 percentage points—about $200 per month in average payment savings. Those characteristics suggest the current wave is concentrated among higher-credit, higher-balance households who financed relatively recently.

Where retention is strongest

Retention gains are uneven across servicer types and loan programs. ICE Mortgage found non-bank servicers retained refinancing borrowers at roughly three times the rate of banks (35% vs. 13%). By product type, retention was highest among FHA and VA mortgages (36%), followed by GSE loans (25%) and portfolio loans (23%). 

For agents, this mix matters because it signals who may get proactive refi outreach first. Clients with government-backed loans—or those serviced by non-banks—may be contacted earlier in a rate-down cycle, which can affect budgets, renovation timing, and move-versus-stay decisions.

The rate backdrop: Lower, still sensitive

Rates remain well above 2020–2021 lows, but they are down from earlier 2025 levels. Freddie Mac’s weekly Primary Mortgage Market Survey put the average 30-year fixed-rate mortgage at 6.22% as of Dec. 11, 2025. 

ICE Mortgage’s analysis also suggests small rate moves can change refinance eligibility quickly. In the Mortgage Monitor, ICE estimated that at a 6.2% rate, about 4.1 million mortgages would be “in the money” to refinance, but at 6.3% the count falls to 3.0 million, illustrating why borrower response can swing with day-to-day pricing. 

What it means for real estate agents

Refinance retention is a lender metric, but it has practical implications for client service and pipeline management:

• Plan outreach to recent buyers. Because most current rate-and-term refis involve 2023–2025 loans, past clients from the last two to three years may be the first to re-engage on financing. That creates natural check-in moments for equity updates and longer-term housing plans.
• Expect more “stay-and-optimize” decisions. Payment-reducing refis can improve household budgets without prompting listings. Some homeowners may delay moves, while others may redirect savings toward upgrades or future down payments.
• Watch equity access strategies. Many owners remain rate-locked on low first mortgages. When a full refinance is less attractive, home equity products can serve as a source of cash for needs such as pre-list improvements and major repairs.
• Align with lender partners on timing. Higher retention means some borrowers may refinance without shopping widely. Clear guidance on fees, timelines, and underwriting fit helps clients compare options beyond the headline rate.

How to use this trend in client conversations

Refinance questions can surface quickly during rate dips, often from homeowners who bought recently and are scanning for small payment improvements. Agents can add value by staying in their lane: clarify the client’s goal (lower payment, shorter term, or cash needs), then connect them with a licensed mortgage professional to run numbers, fees, and timelines. A simple workflow is to segment your database by purchase year, especially 2023–2025, and schedule periodic finance check-ins that tie financing options back to housing goals (renovate, hold, or move).

For clients weighing a move, coordinate early with the lender: a refinance or equity product can change monthly obligations and renovation budgets, which can affect listing timing and purchase preapproval.