Frost Bank has reduced mortgage rates and waived some fees ahead of an expected Federal Reserve announcement, aiming to increase its market share in Texas.
The San Antonio-based bank implemented a 50-basis-point cut on both conventional and jumbo mortgages starting September 8. The new rates are 6 percent for a 30-year fixed conventional loan, 5 percent for a 15-year conventional loan, and 5.75 percent for both 30- and 15-year jumbo loans. Additionally, Frost is waiving up to $1,200 in administrative fees for all conventional and jumbo borrowers. Its Progress Mortgage division, which targets low- and moderate-income borrowers, offers a rate of 5.75 percent with the fee waiver already included.
On September 15, Bankrate reported the national average annual percentage rate for a 30-year fixed mortgage at 6.39 percent and the refinance APR at 6.73 percent. As of now, no other lender in Texas has matched Frost’s combination of lower rates and fee waivers, though analysts anticipate that other lenders may follow after the Federal Reserve’s meeting on September 16–17.
“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.
Some industry professionals say these changes could help more buyers enter the housing market. Brian Gutierrez of NEO Home Loans in San Antonio noted he has been quoting rates between 6 to 6.25 percent on conventional and FHA/VA loans over the past month—a decrease from previous rates ranging from 6.75 to 7 percent.
Gutierrez also observed increased activity among first-time buyers seeking homes under $400,000 due to falling rates and seller incentives such as closing cost assistance ranging from $7,500 to $12,000. The average time homes spend on the market in San Antonio is now at 88 days—an increase of two weeks compared to July data from the San Antonio Board of Realtors.
Refinancing activity is also rising across Texas; according to ATTOM Data Solutions, statewide refinances have increased by about 42 percent year-over-year as borrowers look to reduce debt and save money through lower interest payments. However, high credit card balances remain an obstacle for some homeowners who wish to refinance.
Frost re-entered the mortgage business last year with a focus on handling servicing internally. Day said that Frost aims to establish itself as a leader in this segment.
If competitors respond with similar moves on rates or fees, it could lead to broader changes within Texas’ mortgage lending landscape.
