My brother purchased a house in 2014 and had a rate of 4.5%, then 2 years later he refinanced and was able to get a rate of 2.5%. Why would a bank choose to reduce the amount of money they would get on his mortgage?
In: 2
If his bank doesn’t offer him a refinance, he might find a cheaper rate at a different bank, and they might lose out altogether.
Banks know very well which groups of borrowers are likely to shop around, and which are likely to be faithful customers, and their algorithms take that information into account when deciding on what interest rates to offer.
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