Frost Bank is jumping ahead of the Federal Reserve by lowering mortgage rates and waiving some fees in a bid to grab market share across Texas.
The San Antonio-based bank rolled out a 50-basis-point cut on conventional and jumbo mortgages effective Sept. 8, bringing its 30-year fixed conventional rate to 6 percent, 15-year conventional to 5 percent, and both 30- and 15-year jumbo products to 5.75 percent.
The lender is also waiving up to $1,200 in administrative fees for all conventional and jumbo borrowers. Its Progress Mortgage division, geared toward low- and moderate-income borrowers, is priced at 5.75 percent and already carries a fee waiver, the San Antonio Business Journal reported.
The timing is notable: on Sept. 15, Bankrate pegged the average national 30-year fixed mortgage annual percentage rate at 6.39 percent and refinance APR at 6.73 percent. No other Texas lender has matched Frost’s rate and fee package so far, though analysts expect broader declines after the Fed’s Sept. 16–17 meeting.
“Instead of waiting for the Fed or the markets, we decided to lower the cost barrier for potential homebuyers or refinancers now,” said Bill Day, senior vice president at Frost.
The math could help some potential home buyers pull the trigger on a purchase.
“Over the last 30 days, I’m quoting 6 to 6.25 percent on conventional and FHA/VA loans, down from 6.75 to 7 percent,” Brian Gutierrez of NEO Home Loans in San Antonio told the outlet.
Gutierrez said he is seeing a surge in first-time buyers targeting homes under $400,000, spurred by easing rates and seller concessions. In San Antonio, the average market time is 88 days — a 14-day increase from the San Antonio Board of Realtors’ July report — and sellers are offering $7,500 to $12,000 in closing cost assistance.
Gutierrez said refinances are also climbing — up 42 percent year-over-year statewide, according to ATTOM Data Solutions — as borrowers look to shed debt and lock in savings. But he noted that high credit card balances, a byproduct of prolonged high interest rates, are still sidelining some would-be refinancers.
Frost just jumped back into the mortgage business last year. The bank focuses on in-house servicing and is positioning itself as a market leader, Day said.
Frost might have forced a rate war if competitors follow suit.
— Eric Weilbacher
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