Refinance demand for FHA loans jumps 24%, as homeowners seek the most savings they can
Published Wed, Dec 10 2025
7:00 AM EST
Diana Olick@in/dianaolick@DianaOlickCNBC@DianaOlickWATCH LIVEKey Points
- The average rate for 30-year fixed-rate mortgages with conforming loan balances, $806,500 or less, increased to 6.33% from 6.32%
- Total applications to refinance a home loan rose 14% last week compared with the previous week.
- Applications for a mortgage to purchase a home dropped 2% for the week and were 19% higher than the same week one year ago.
Manusapon Kasosod | Moment | Getty Images
Current homeowners are looking for any savings they can get, and with mortgage rates on conventional loans not moving much, that isn't easy. Loans from the Federal Housing Administration (FHA), which require mortgage insurance, however, are providing an outlet.
Total applications to refinance a home loan rose 14% last week compared with the previous week, according to the Mortgage Bankers Association's seasonally adjusted index. Volume was 88% higher than the same week one year ago. The refinance share of mortgage activity increased to 58.2% of total applications from 53.0% the previous week.
Demand for FHA refinances was up 24% for the week, as the FHA interest rate for 30-year fixed rate loans fell to 6.08% the lowest level since September 2024.
In contrast, the average rate for 30-year fixed-rate mortgages with conforming loan balances, $806,500 or less, increased to 6.33% from 6.32%, with points increasing to 0.60 from 0.58, including the origination fee, for loans with a 20% down payment.
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Applications for a mortgage to purchase a home dropped 2% for the week and were 19% higher than the same week one year ago. Potential buyers are also turning to the FHA for additional savings.
"Conventional purchase applications were down for the week, but there was a 5 percent increase in FHA purchase applications as prospective homebuyers continue to seek lower downpayment loans," said Joel Kan, an MBA economist in a release.
Mortgage rates on conventional loans moved even higher to start this week, according to a separate survey from Mortgage News Daily. Markets are now waiting for commentary from the Federal Reserve Chairman at Wednesday's meeting. It is widely expected the Fed will cut its rate, but the last two times it did that mortgage rates rose sharply.
"The cut itself is not the news the market is waiting for. Rather, traders are interested to see each Fed member's rate outlook via the quarterly release of the Fed's economic projections," wrote Matthew Graham, chief operating officer at Mortgage News Daily. "In addition, every Fed meeting includes a press conference with the Fed Chair, and bonds have often made the biggest moves in response."