The Future of Refinancing: A Game-Changer for Borrowers and Lenders

The global refinancing market size is expected to reach USD 34.04 billion by 2030, registering a CAGR of 7.5% from 2022 to 2030, according to a new report by Grand View Research, Inc. The growth can be attributed to the better financing options offered by the refinancing solutions, coupled with benefits such as lower interest rates and a convenient process. On the other hand, borrower benefits from favorable terms of loans in a cash-out refinance, which would generally be useful for medical, debt payment, and investment for long-term savings.

Several refinancing solution providers are focusing on expanding their services to offer refinancing services efficiently. For instance, in March 2022, Better Holdco, Inc. announced the expansion of its mortgage services to the U.S. state of Hawaii, building upon the launch of Better Mortgage in the state of Massachusetts in November 2021. The company’s mortgage services are now available to almost 99% of the U.S. market, thereby facilitating real estate, mortgage, homeowner insurance, and title services while eliminating lender fees and commissions.

Moreover, the growth of the refinancing industry can be attributed to the benefits of refinancing for personal and commercial activities. According to Freddie Mac, borrowers could reduce mortgage payments by an average of 1.15% in 2021 by refinancing first-lien conventional mortgages, saving about USD 2,700 in mortgage payments annually. Such a reduction in mortgage payments is expected to create lucrative growth opportunities for the market over the forecast period.

The COVID-19 pandemic is expected to positively impact the growth of the industry. Several refinancing solution providers started expanding their loan capability to offer better services to customers. For instance, in October 2021, Caliber Home Loans, a financial service provider, announced an expansion of loan limits on conforming loans to USD 625,000 across its retail, wholesale, and direct-to-consumer channels. The previous limit was capped at USD 548,250, and expanding the limit would allow more borrowers to qualify for large loan amounts.

Refinancing Market Report Highlights

In terms of type, the adjustable-rate mortgage refinancing segment is anticipated to register the highest CAGR over the forecast period. The flexibility of adjustable-rate mortgage refinancing to be used as short and long-term refinancing instruments is expected to drive the segment’s growth
In terms of deployment, the on-premises segment dominated the market in 2021. The growing adoption of loan software systems for on-premise mortgage origination, including refinancing and management, is a significant factor driving the segment’s growth
In terms of end-use, the personal segment dominated in 2021. Borrowers are widely adopting refinancing services to reduce monthly payments in a lower interest rates environment
The presence of a large number of refinancing solution providers and government-sponsored enterprises in North America is expected to create lucrative growth opportunities for the regional industry

Refinancing Market Segmentation

Grand View Research has segmented the global refinancing market based on type, deployment, end-use, and region:

Refinancing Type Outlook (Revenue, USD Billion, 2017 - 2030)