Freddie Mac reported last week that in the first quarter of 2006, 88% of Freddie-owned loans were refinanced into new mortgages with loan amounts that were at least 5% higher than the original loan. This compares to 81% in 4Q05, and is the highest since the third quarter of 1990, according to Freddie Mac.
In 1Q06, mortgage rates were on an upward trend. After falling to a low of 6.10% in mid-January, the 30-year fixed rate ended the quarter at 6.35%. Apparently, rising mortgage rates that were still relatively attractive encouraged borrowers to act, particularly to consolidate home equity lines of credit that were tied to the prime rate.