Borrower Shopping Index: Refinance Lender Efficiency, 2018–2025

During the refi boom of 2020–2021, over 8 million rate & term and cash-out refinance loans closed annually — and borrowers barely shopped. The Borrower Shopping Index (BSI) captures this through loan-level outcomes: the share of applications withdrawn or not accepted by the applicant, relative to closed loans. Unlike surveys, it reflects what borrowers actually did. At peak volume, market BSI sat at just 27–28%.

Then rates rose sharply. By 2023, refi originations had collapsed 88% to under 950,000. BSI hit 43%. When rates make every basis point costly, refinance borrowers compare aggressively and walk if the offer misses. By 2025, volume recovers to 1.75M, but BSI holds at 38.7%. Rate-sensitive behavior is now the baseline.

The market average, however, hides the sharper story. The most efficient lenders have run BSI in the low-to-mid teens — across boom and bust alike. When the market hit 43%, the leaders were at 12–13%. Their number barely moves because BSI, for them, reflects something structural: product-to-borrower fit, pricing discipline, and the ability to meet borrower need the first time.

The gap between market and best-in-class is roughly 3x — consistent across every rate environment. If your refi BSI tracks near the market average, some of that is conditions. The rest is recoverable.