Frost Bank has reduced its mortgage rates and waived certain fees in an effort to attract more borrowers across Texas. The San Antonio-based bank implemented a 50-basis-point cut on both conventional and jumbo mortgages starting September 8. This adjustment sets the 30-year fixed conventional rate at 6 percent, the 15-year conventional at 5 percent, and both 30- and 15-year jumbo products at 5.75 percent.
In addition to the rate cuts, Frost is waiving up to $1,200 in administrative fees for all conventional and jumbo borrowers. Its Progress Mortgage division, which serves low- and moderate-income clients, offers a rate of 5.75 percent with an existing fee waiver, according to the San Antonio Business Journal.
The move comes just before the Federal Reserve’s meeting scheduled for September 16–17. As of September 15, Bankrate reported that the national average for a 30-year fixed mortgage annual percentage rate was 6.39 percent, with a refinance APR of 6.73 percent. No other Texas lender has matched Frost’s combination of rates and fee waivers so far, though industry analysts anticipate that broader declines may follow after the Fed’s decision.
“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.
Lower rates could make it easier for some buyers to purchase homes. Brian Gutierrez of NEO Home Loans in San Antonio noted that he has recently quoted rates between 6 and 6.25 percent on conventional and FHA/VA loans—down from previous levels of up to 7 percent.
Gutierrez also observed an increase in first-time buyers seeking homes under $400,000 due to easing rates and seller concessions. In San Antonio, homes are staying on the market longer than before—an average of 88 days compared to earlier reports—and sellers are offering between $7,500 and $12,000 in closing cost assistance.
Refinancing activity is also rising statewide; ATTOM Data Solutions reports a year-over-year increase of 42 percent as borrowers seek lower payments or debt consolidation options. However, Gutierrez pointed out that high credit card balances remain a barrier for some would-be refinancers because of sustained high interest rates.
Frost Bank re-entered the mortgage business last year with a focus on servicing loans internally. According to Day, the bank aims to position itself as a leader in this market segment.
If other lenders respond by lowering their own rates or fees, Frost’s actions could trigger wider competition among Texas banks.
