Lower rates sent applications to refinance mortgages shooting up 17.7 percent the week ending July 10, but requests for purchase loans were down 9.4 percent, the Mortgage Bankers Association said in releasing the results of its Weekly Mortgage Applications Survey.

Requests for refis accounted for 54.9 percent of all mortgage applications, up from 48.4 percent the previous week. Mortgage financier Freddie Mac anticipates refinancings will account for 67 percent of a projected $2.3 trillion in mortgage originations this year (see story).

The surge in refinancings pushed the MBA’s Market Composite Index, a measure of all mortgage loan application volume, up 4.3 percent on a seasonally adjusted basis from one week earlier.

The average contract interest rate for 30-year fixed-rate mortgages decreased to 5.05 percent from 5.34 percent, with points decreasing to 1.12 from 1.13 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans.

The average contract interest rate for 15-year fixed-rate mortgages decreased to 4.59 percent from 4.83 percent, with points increasing to 1.07 from 1.06 (including the origination fee) for 80 percent LTV loans.

The average contract interest rate for one-year adjustable-rate mortgage (ARM) loans decreased to 6.47 percent from 6.58 percent, with points decreasing to 0.11 from 0.14 (including the origination fee) for 80 percent LTV loans.

Applications for ARM loans accounted for 5 percent of loan requests, up from 4.4 percent of total applications the previous week.

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