PURCELLVILLE, Va. — A short-lived drop in mortgage rates earlier this year led to a sharp increase in refinancing activity, with rate-and-term refinance applications jumping 300% in April alone, according to Ardley Technologies’ Q2 2025 Mortgage Market Insights Report.
The report, based on data covering 13% of all U.S. mortgages, found that a 20-day period of lower interest rates between late March and mid-May resulted in a fivefold increase in rate-and-term eligibility and accounted for 56% of all first-lien applications during the quarter.
“This quarter proved that borrowers respond to rate movements within days, not weeks,” Nathan Den Herder, founder and CEO of Ardley Technologies, said in a statement. “Speed and precision are no longer mere advantages—they’re now essential.”
Despite a 50% decline in overall rate-and-term eligibility from the first quarter, Ardley said borrowers responded quickly to the brief rate window. Those who refinanced during the period had mortgages averaging 5.09 years old, largely missing out on the ultra-low rates of the pandemic era, the company said.
Additional Findings
Additional findings from the report include:
- Rate-and-term refinances rose to 56% of first-lien applications in Q2, up from 22% in Q1.
- Borrowers with COVID-era rates averaging 3.98% showed little interest in refinancing, instead turning to second liens to tap equity.
- Average cash withdrawn from second mortgages rose from $60,000 in Q1 to $70,000 in Q2.
- Purchase activity improved in June, with opportunities growing 2.4 times compared to April and May.
Haley Rader, Ardley’s head of product, said borrower behavior is dividing into two distinct groups: those holding low pandemic-era rates are extracting equity, while others are quick to refinance at the first sign of relief.
A projected 50-basis-point rate drop by the Federal Reserve could double rate-and-term eligibility overnight, Rader said, emphasizing the importance of lender tools that surface opportunities in real time.
The full report is available at Ardley’s website.
