Chase Home Lending offers temporary mortgage rate discount

Chase Home Lending is offering a mortgage rate discount for the next two weeks to boost activity in the second half of the spring homebuying season.

The promotion offers rate cuts of as much as 25 basis points, depending on product and location, on new-home purchases as well as rate-and-term and cash-out refinance loans from May 4 through May 17, according to the lender's website. The offer is available across multiple loan products, including Federal Housing Administration loans, and to new and existing customers.

"With that kind of discount, customers could have the ability to purchase about 2.5% more home," Erik Schmitt, consumer direct executive at Chase Home Lending, told National Mortgage News. "It gives [buyers] a little more purchasing power in a very competitive environment. It also allows us to interact potentially with more customers, build trust ... as well as attract some first-time homebuyers."

To qualify, the borrower must meet the minimum credit score and loan-to-value requirements of the loan product selected, the website said.

The discount can be combined with other Chase benefits, such as its relationship pricing program. The program offers rate cuts between five and 100 basis points for purchase or refinance mortgages, depending on how much money the borrower keeps or moves into eligible Chase deposit and J.P. Morgan investment accounts.

After dropping for three consecutive weeks, the 30-year fixed-rate mortgage increased seven basis points last week, bringing it back up to 6.3%, well above the 5.98% seen in late February but still 46 basis points below the same week last year, according to Freddie Mac.

While last week's spike didn't directly lead to the sale, the overall affordability struggles potential homebuyers face did, Schmitt said.

"We decided to look at the market, look at the opportunity to provide a discount, rates are a little bit elevated [and] affordability is still constrained, and we thought [this] would be a good time to offer it," he added. "We've done it periodically [when] we believe it will provide the maximum benefit for customers and us."

Chase rolled out a similar promotion two months ago at the beginning of the homebuying season, starting in late February and running through March 8. The lender also offered temporary discounts on purchase loans last August.

"We saw a really big lift in the number of customers we were able to assist from the February rates that we ran," Schmitt said, "[and] so we wanted to run it again in May."

Whether Chase offers another sale later in the summer again this year depends on the state of the market at the time and if it will make a significant difference to borrowers, he added.