Refinance retention reached a 3.5-year high (28%) during the third quarter with servicers retaining more than half of borrowers refinancing out of 2024 vintage loans, according to the newly published December 2025 ICE Mortgage Monitor Report.
Rate-and-term retention rose to 37%, one of the highest points in the past decade, while cash-out refinance retention rose to 23%, which the report attributed to “the challenge of identifying and retaining equity-seeking borrowers.”
Non-banks retained refinancing borrowers at roughly three times the rate of banks (35% versus 13%). Retention was highest among FHA and VA mortgages (36%), trailed by GSE (25%) and portfolio-held loans (23%) and privately securitized loans (6%).
“Rate-and-term refinances accounted for 62% of all refinance activity in October, the highest share in nearly five years,” the report stated. “An estimated 95% of rate-and-term refinances in September and October involved 2023–2025-era loans, with the average refinancer carrying a loan balance of $505,000 and a credit score around 762. On average, they reduced their mortgage rate by 0.92 percentage points, translating to an average monthly savings of about $200.”
Home affordability reached its best level in nearly three years with the monthly principal and interest payment for a median-priced home to $2,126 – a payment that equals 29.7% of the median household income. The report added that second-lien home equity loan withdrawals in the third quarter rose to their strongest level since 2007 as the decline in short-term rates made tapping equity more affordable.
