Brockton’s HarborOne Credit Union says the dramatic year-over-year increase in the number of mortgage applications it has received in the first two months of the year are the result of a simple “rate game.”

As of the end of February, HarborOne had taken in 984 mortgage applications, representing about $199 million in business. In the same period a year ago, members filed 357 applications worth about $64 million, spokesman James Rice told Banker & Tradesman.

But the increase isn’t necessarily a sign that the housing market, or the economy in general, has improved by any significant measure. Instead, borrowers are perhaps more confident that interest rates may be as low as they’ll get.

“It’s a rate game,” Rice said. And all the Boomers in Brockton are playing.

“People are seeing (rates) in print, we’re running them online, and people are seeing it,” Rice continued.

Rice explained that applications for purchase mortgages made up 27 percent of all loan applications in the first two months of the year. They made up nearly 40 percent of all applications a year prior.

But the situation is reversed for refinance loans, which made up nearly 40 percent of loan applications in January and February compared to 30 percent a year ago.

In a statement, HarborOne attributed its overall loan application increase “primarily to our attractively priced 15- and 10-year mortgage loans.”

Rice took that a step further.

“It’s really the boomers starting to plan for retirement,” he said. “They’re in their early 50s to early 60s. They’ve got a 30-year product that’s got 10 years left on its term and they’re reducing that into a 10-year product.”

With interest rates under 3 percent, homeowners “are keeping the payments they have, or making them slightly higher, but are significantly reducing the term,” Rice said.

And loans on properties purchased 10 or 15 years ago generally show strong loan-to-value ratios. Their owners typically have solid credit scores, too.

Challenge Continues

Rice said the borrowers boosting HarborOne’s balance sheet are from throughout the credit union’s territory, but the greatest number come from Brockton itself, where HarborOne is headquartered.

Mary Buck, vice president and regional manager for Rockland Trust’s mortgage division, said she agrees with HarborOne’s assessment of the market.

“It’s definitely been a quicker start to this year than last year,” Buck told Banker & Tradesman, “But we’re below 3 percent on a 30-year fixed, so we’re even seeing a lot of people who don’t necessarily have good credit, but they figure they should try.”

Buck said Rockland, beginning last year, has also seen more homeowners who may be halfway through a 30-year mortgage refinancing to a shorter term.

“They’re 15 or 10 years in, and with rates in the low 3s, they may even break even (on monthly payments),” she said.

But she cautioned that property valuation “continues to be challenging.”

“We educate our loan officers to do their due diligence,” Buck said. “It’s something they need to be aware of. And you have to educate the customer.”