themortgagellm™Cash-out vs rate-and-term refi mix in 2024
“What was the cash-out vs rate-and-term refinance mix in 2024, and how does it compare to the 2020-2021 boom?”
Response
2024 vs. 2020-2021 HMDA refinance-mix comparison, restricted to first-lien refinance originations (the conventional analyst cut — subordinate / HELOC / piggyback flow is reported separately):
| Year | Rate-and-term | Cash-out | Total first-lien refis | Cash-out share |
|---|---|---|---|---|
| 2020 | ~6.57M (75.7%) | ~2.11M (24.3%) | ~8.68M | 24.3% |
| 2021 | ~5.61M (65.6%) | ~2.95M (34.4%) | ~8.55M | 34.4% |
| 2024 | ~545K (49.3%) | ~560K (50.7%) | ~1.10M | 50.7% |
2024 is the first post-2018 HMDA vintage in which cash-out edges past rate-and-term as a share of first-lien refi. The shift is composition-driven, not absolute: cash-out volume contracted ~74% from its 2020 peak (~2.11M → ~560K), while rate-and-term collapsed ~92% (~6.57M → ~545K).
What's driving the composition shift:
- Rate-and-term lock-in. Roughly 70% of outstanding mortgages carry note rates below 5%; with 2024 origination rates sitting at 6.5-7.5%, refinancing rate-and-term moves a borrower into a higher payment. Demand collapsed disproportionately.
- Cash-out resilience. Borrowers with rate-locked equity continue to extract via cash-out for home improvement, consolidation, or rental-property down payments — accepting the rate premium because the use of proceeds justifies it.
- HELOC alternative. Some cash-out demand has migrated to HELOC products that preserve the first-lien rate; HMDA-reportable first-lien cash-out volume is somewhat understated relative to the true equity-extraction picture (HMDA-reportable HELOC originations sit separately under
open_end_line_of_credit = 1).
A note on the cut: if you include all liens (subordinate refis + HELOC refis), 2024 raw HMDA reports approximately 770K cash-out + 700K rate-and-term originations — a 52% / 48% mix on a ~1.47M base. The first-lien-only cut is the cleaner comparison to the 2020-2021 boom-era figures, which are also typically reported first-lien-only in the trade press.