Refinancing activity is primed for a surge — but not the way we’ve seen in the
past.
It used to be that when rates dropped, demand would stay high for weeks or even
months. Lenders had time to scale up operations and ride the wave. Now, demand
comes in short, sharp bursts, triggered by even the slightest rate drops.
Take April 2025 for example. Mortgage rates briefly fell to 6.61%, their lowest
point since October 2024. In just one week, refinance applications shot up 35%,
hitting their highest point in six months. The average loan size also jumped to
$399,600 — the second-highest ever recorded.
Unfortunately, this brief spike didn’t last. By mid-April, rates had bounced back to
6.90%, erasing nearly 30 basis points in just two weeks.
But it did offer a valuable lesson: when rates dip, borrowers are ready to move —
and they will gravitate toward the lender that makes the process easiest. And in
today’s market, the real risk isn’t just missing a fleeting opportunity — it’s losing
existing customers to competitors who deliver a faster, more seamless
experience. The next time rates fall, it won’t be enough to simply be available.
Lenders must be ready to engage borrowers instantly, or risk losing them for
good.
A shifting market demands a faster response
Many borrowers who locked in loans over the past few years are sitting on
tappable equity and watching the market closely. According to the Consumer
Financial Protection Bureau (CFPB), if rates ease to 6.5%, roughly 2.5 million
borrowers could refinance. If rates drop further to 5.5%, that number jumps to
more than 7 million.
In other words, millions of borrowers could become eligible in a very short
window. This will create a surge in demand that lenders must be prepared to
capture.
The brief refinance surge in April 2025 made the stakes clear. When rates dipped,
applications jumped — but the window closed just as quickly. Lenders who
weren’t prepared with digital experiences, pre-filled applications, and instant
decisioning missed out on the opportunity.
Lenders no longer have weeks to react. They have days — sometimes just hours
— to meet borrowers where they are, before the opportunity slips away.
Meanwhile, big servicers like Rocket already have the advantage. With fully digital
workflows and always-on borrower engagement, they can deliver personalized
offers the moment a borrower becomes eligible — capturing business before
others even have a chance to respond.
And the gap is only growing. Rocket’s acquisition of Mr. Cooper signals a new
phase for the industry: one where servicing and origination technology are fully
connected to enable real-time borrower activation. The largest players aren’t just
managing portfolios — they’re building the infrastructure to monetize them
instantly when rates shift.
In this environment, lenders have one shot to capture refinance opportunities —
and speed matters more than ever.
How to compete (and win) against the giants
Lenders don’t need to match the largest servicers in size or spending to stay
competitive. What they need is a better borrower experience — one that makes
refinancing faster, simpler, and more intuitive at exactly the moment borrowers are
ready to act.
Today’s borrowers expect an experience that feels as easy as the digital services
they use every day — one that doesn’t require lengthy forms, manual paperwork,
or multiple phone calls to get started. The lender that removes barriers and
delivers a seamless experience will be the one that earns the borrower’s trust —
and their business.
Blend’s Rapid Refi solution is built to help lenders meet this moment. It’s
specifically designed to maximize early-funnel conversion and re-engage past
borrowers at scale. Instead of relying on outbound calls or marketing campaigns
to chase borrowers, Rapid Refi makes it easy for them to return on their own — by
delivering a fast, intuitive refinance experience that’s personalized, self-serve, and
available the moment they’re ready to act.
Borrowers can move from inquiry to intent-to-proceed (ITP) in a single session —
typically in just 20 minutes, compared to the industry average of seven days.
Smart automation, data-driven qualification, and borrower self-serve workflows
also help lenders accelerate time to close by up to 3x, giving them the ability to
capture volume quickly when rate opportunities emerge.
Critically, Rapid Refi enables lenders to scale efficiently during market surges —
eliminating the need for large staffing increases to handle temporary spikes in
demand. By removing unnecessary friction and delivering a connected, intuitive
borrower journey, lenders can drive higher retention rates, build deeper customer
loyalty, and protect revenue growth in an increasingly volatile market.
In a landscape defined by fleeting rate windows and rising borrower expectations,
simplicity and speed aren’t optional — they are the foundation for competitive
advantage.
Conclusion
The next wave of refinance activity will not unfold the way it has in the past.
Opportunities will appear quickly — and disappear just as fast. Lenders who are
prepared to deliver a fast, seamless experience will be best positioned to retain
their existing customers and grow their portfolios, even in a highly competitive
environment.
Success in this market will come down to meeting borrower expectations for
simplicity, speed, and trust. Traditional refinance processes, which often rely on
manual steps and delayed decisioning, will no longer be enough to compete.
Blend’s Rapid Refi solution is designed to help lenders address these challenges
head-on. By combining automated workflows, data-driven qualification, and
self-serve borrower experiences, Rapid Refi enables lenders to engage customers
early, move quickly through the process, and close loans with far greater
efficiency — all while strengthening borrower relationships.
Institutions that invest now in modern, connected refinance experiences will be
better equipped to capture fleeting opportunities, protect their customer base, and
build long-term growth.
Learn how Rapid Refi can help you retain more customers and capture more
opportunities.
To request a Rapid Refi demo