ICE Mortgage Technology, neutral provider of a robust end-to-end mortgage platform and part of Intercontinental Exchange, Inc. (NYSE: ICE), today released its August 2025 Mortgage Monitor report. ICE data reveals that mortgage originations had their highest quarterly volume since 2022, with both purchase and cash-out refinance activity nearing three-year highs. At the same time, total and tappable home equity volumes were the highest on record.
“Homeowners are actively drawing on record equity with cash-out refinance loans, signaling increased demand despite elevated rates,” said Andy Walden, Head of Mortgage and Housing Market Research at ICE. “Meanwhile, a substantial cohort of people who purchased homes over the last three years are watching on the sidelines for rates to drop so they can refinance into a lower monthly payment.”
- Cash-out refinances drive the majority of refinance activity
Cash-out refinances accounted for 59% of all refinance transactions in the second quarter. Notably, 70% of those borrowers accepted higher interest rates, averaging a 1.45 percentage point increase, in exchange for tapping an average of $94,000 in home equity. These borrowers saw monthly payments increase by about $590. Cash-out borrowers tended to have lower average credit scores (719) and smaller loan balances ($188,000) compared to their rate-and-term counterparts. See the full report for more detail.
- Home equity hits record high
Tappable equity hit another record high in Q2, with borrowers entering Q3 with a record $17.8 trillion in total equity, including $11.6 trillion in tappable equity that can be accessed while maintaining a 20% cushion. Roughly 48 million mortgage holders had tappable equity, with the average homeowner holding $213,000 in accessible value.
- Slowing home prices may signal plateauing equity growth
While equity levels remain high, the pace of home equity growth has slowed to its lowest rate in two years. This deceleration is largely attributable to declining home prices in key Sunbelt and Western markets. Cities like Austin (-38%) and Deltona, Fla. (-37%) have seen tappable equity per borrower fall by more than 25% from recent peaks. Nearly one-quarter of U.S. markets have experienced at least a 5% drop in tappable equity. Additionally, about 1% of mortgage holders – roughly 564,000 borrowers – now owe more than their homes are worth.
Homeowners turning to cash-out refinances in Q2 posed challenges – and opportunities – for mortgage servicers seeking to retain homeowners’ business.
Retaining cash-out borrowers a challenge for mortgage servicers
- Cash-out prospects can be difficult to identify using rate-based triggers alone, and as a result, retention for these loans hit a more-than-four-year low. This brought down overall refinance retention to 23%, the lowest level since Q2 2024. Despite these challenges, Q2 also featured bright spots for mortgage servicers. Retention rates among borrowers who purchased in 2024 came in at 43% – nearly double the market average – showing that lenders who are top-of-mind with borrowers are more likely to win repeat business.
“As homeowners increasingly look to access their equity, lenders and servicers need tools that help reach them first,” said Tim Bowler, President of ICE Mortgage Technology. “By embedding refinance capabilities within the servicing experience – as we did with the newest integration between our MSP® servicing and Encompass® loan origination systems – we offer customers a powerful way to stay ahead of borrower intent when timing is everything. Additionally, our robust data and analytics enable customers to move beyond simple rate-drop targeting to strengthen retention.”
The full August Mortgage Monitor report contains a deeper analysis of June mortgage performance, mortgage origination opportunities and trends, and a housing market update featuring July ICE Home Price Index (HPI) data.
Further detail, including charts, can be found in this month’s Mortgage Monitor report.
