Mortgage loans allow households to buy a home or to borrow money against the value of a home they already own. With mortgage loans, the real estate is offered as collateral, a payback guarantee for the lender.
Our FRED graph above shows the billions of dollars lent by large US banks to consumers in newly issued mortgage loans. Data are available between the third quarter of 2013 and the second quarter of 2025. Each of the three lines represents a separate purpose for borrowing these funds:
- Purchasing a home (solid blue line)
- Refinancing the mortgage to secure more affordable repayment terms, including the interest rate on the loan (dashed green line)
- Refinancing the mortgage to receive a cashout for the difference between the new mortgage loan and the original loan (dashed orange line)
The relative importance of each purpose has changed over time.
Between 2013 and 2016, for every new dollar borrowed to purchase a home, another dollar was borrowed to refinance a mortgage loan. Between mid-2017 and mid-2019, new borrowing for home purchases outpaced refinancing. Between 2019 and 2021, during the COVID-19 pandemic, refinancings rose above new mortgages as homeowners took advantage of lower interest rates, despite many homeowners changing locations and moving into new homes.
Starting in 2022, when interest rates began to rise, mortgage refinancing quickly declined. Soon after, borrowing to purchase a home also declined, but not as much. As of mid-2025, the latest data available at the time of this writing, new borrowing to purchase a home was 2.7 times larger than borrowing to refinance a mortgage loan.
How this graph was created: Search FRED for and select “Large Bank Consumer Mortgage Originations: Purpose Type: Purchase.” Click on the “Edit Graph” button and select the “Add Line” tab to search for and select “Large Bank Consumer Mortgage Originations: Purpose Type: Refinance – Rate / Term & Other Refinance.” Don’t forget to click on “Add data series.” Repeat the last two steps to search for and add the third series: “Large Bank Consumer Mortgage Originations: Purpose Type: Refinance – Cashout.”
Suggested by Diego Mendez-Carbajo.