ARM, refi products widen credit access

Mortgage credit availability ended November at its loosest since August 2022, driven by additions of adjustable rate and cash-out refinance products to lenders' menu, the Mortgage Bankers Association said.

The 0.7% month-to-month rise in the Mortgage Credit Availability Index continues a streak which for every month in 2025 except January it was above the 100 baseline number used to determine a tight or loose credit market. From April 2023 through January, the index was under the baseline.

November's MCAI was 107.5, up from 106.8 in October and 95.9 one year ago. The last time the index was this high was in August 2022, when it was 108.3.

Mortgage lenders noted an influx of refi applications starting in September. This past week's Freddie Mac Primary Mortgage Market Survey had the 30-year fixed at 6.19%, 70 basis points lower than where they were at the end of May.

The additional ARM and refi products added to lenders' menus pushed the conventional index and its jumbo component to their highest level since 2020, said Joel Kan, the MBA's deputy chief economist, in a press release.

"Most of these loan programs still require lower [loan-to-value ratios] and higher credit scores to qualify," Kan noted. "The mortgage rate on ARM loans is averaging almost 90 basis points lower than fixed-rate loans, so they remain a viable option for borrowers hoping to reduce their monthly payments or utilize some of their home equity."

Last week's MBA Weekly Application Survey, where the data gathering period included the Thanksgiving holiday, tracked the conforming 30-year FRM at 6.32%, and the 5/1 ARM product at 5.4%.

Although the survey's refi index was 4% lower than the prior week, it was up 109% versus the prior year. Purchase application volume, on an unadjusted basis, was up 17% year-over-year.

The conventional MCAI was up 1.1% over September, with its jumbo portion up by 1.6% while the conforming was unchanged.

The government MCAI was unchanged as well, the MBA said.