Rate-and-Term vs Cash-Out Refinance Volume

Refinance

Origination Trends

Loan Pricing

Bar and line chart, January to July 2026, monthly. Blue bars show agency rate-and-term refinance loans peaking near 117,000 in March and falling to about 48,000 in May. Gold bars show cash-out refinances holding between about 42,000 and 53,000 through May. Two lines show average note rates, cash-out above rate-and-term, with the gap widening from 0.34 percentage points in January to 0.39 in May. June and July are preliminary. Data through August 2026; August is not shown because of securitization lag. Source: Polygon Research, Polygon Pulse (MBS Pivot).

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Data Points

What happened to mortgage refinancing before the Fed raised rates?

Agency rate-and-term refinances fell 59% from March to May 2026 as the average note rate rose 0.15 percentage points. Cash-out refinances slipped 15%, and by May the two were nearly even.

Date Published:

September 18, 2026

Date Updated:

September 18, 2026

Chart type:

Line Chart

Suggested Citation:

Polygon Research, "Agency Refinance Loans and Average Note Rate, Rate-and-Term vs Cash-Out, Jan to Jul 2026," Polygon Pulse – MBS Pivot, published September 18, 2026. Scope: refinance loans in Fannie Mae, Freddie Mac and Ginnie Mae MBS by origination month. Metrics: loan count and count-weighted average note rate by refinance purpose; cash-out rate premium in percentage points. Data through August 2026; August is not shown because of securitization lag; June and July 2026 are preliminary. Accessed September 18, 2026.

Key insights

Agency rate-and-term refinances fell 59% between March and May 2026, from about 117,000 loans to about 48,000. The average note rate on those loans rose 0.15 percentage points over the same two months, from 5.74% to 5.89%. The Federal Reserve raised its target rate on September 16. The refinance window had closed five months earlier.

Cash-out refinances slipped 15% over the same stretch. Borrowers taking cash out paid 0.34 percentage points more than rate-and-term borrowers in January and 0.39 more in May, and their average debt-to-income ratio held near 39% all year. That demand comes from a need for cash, and it holds when rates rise. Preliminary June and July counts show cash-out as the majority of agency refinances.

For loan officers, the refinance conversation left in this market is about equity. For homeowners, a Fed increase passes through quickly to HELOCs and credit cards priced off the prime rate. A fixed-rate cash-out refinance locks the cost of that debt.

The national lines hide the spread underneath. Cash-out share, pricing and borrower credit differ by state, by seller/issuer and by loan type. Explore refinance lending in MBS Pivot.

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