Why Customer Retention Is the Most Urgent Priority in a Shifting Mortgage Market

This article originally appeared in the September 2025 edition of MortgagePoint magazine, online now.

In what amounts to perhaps the mortgage industry’s biggest surprise this year, the mortgage market in 2025 has become reasonably predictable. Mortgage rates are elevated and remain so. Refinance activity is dearth. Purchase volume is suppressed, with an affordability crisis worsening. And conflict continues between the Trump administration and the Federal Reserve regarding lowering rates. 

A few other things haven’t changed. Borrower expectations continue to rise, driven by the increasingly digital life they lead. Lenders and servicers are pressed to invest in improved technology and digital service delivery, raising the specter of cost increases against sluggish revenue growth. How can lenders and servicers recoup these costs and increase revenue in this environment? They need look no further than their own servicing portfolio, which is, for most companies, an under-exploited source of originations and revenue growth. 

According to the Mortgage Bankers Association, the industry average refinance retention rate sits at just 15%. That means an astounding 85% of customers leave when they refinance. Purchase retention is even worse. That’s a massive leak—and a sizable opportunity for servicers. After all, if they’ve done a good job with servicing, they are in the pole position with the customer, having earned customer trust (and their data). 

It’s clear there’s room for servicers to improve retention, so we’re sharing an approach that Sagent sees among servicers who are making headway: they’re leveraging technology to offer a modern, compliant, and connected experience that turns customer trust into customer loyalty. Let’s take a look. 

Why Retention Is Now a Servicing Issue

Historically, retention has been viewed as a sales or origination function. But the truth is, servicing is the single most consistent and enduring touchpoint homeowners have with a lender. That makes it the most powerful engine for retention—if the strategy, technology, and people processes align to deliver an exquisite borrower experience. Homeowners don’t want to start over every time they consider refinancing or buying again. If you’ve built trust through years of timely payments, hardship support, and solid communication, that trust should convert into lifetime value. 

Rates Will Eventually Fall. Are You Ready to Retain?

It’s hard to predict how or when rates will drop, but we do know two key things. First, the Trump administration wants the Fed to lower rates and can appoint a new Fed Chair when the current Fed Chair’s term expires in May 2026. 

Second, if jobs growth and economy soften and inflation continues to moderate, current Fed leadership may resume the rate cuts they began last year. 

Like the rest of the now-predictable housing market, this is a “when” and not an “if.”  Being prepared requires modern tech, borrower insights, and timely engagement. Here’s a rundown. 

How Smart Servicers Boost Retention

• Unified Data & Real-Time Engagement: Leverage every interaction—from payment activity to support requests—to understand borrower behavior and offer timely, relevant next steps. 

• Personalized Borrower Experiences: Move beyond one-sizefits-all marketing. Use servicing insights to deliver highly personalized offers when homeowners are most likely to act. 

• Self-Serve Tools With Human Support: Homeowners expect control but still value empathy. Offer digital self-service backed by smart, accessible servicing professionals. 

• Integrated Retention Tech: Use platforms (like Dara) that connect servicing with lead generation, customer insights, and real-time engagement—all while maintaining compliance. 

Retention Improves Revenue and Customer Experience

It’s time to stop thinking of servicing as a cost center. The smartest lenders in today’s market are using servicing as a growth lever—maximizing lifetime value and cutting recapture costs. 

In a market where every basis point counts, improving your customer retention by even 5 to 10 points will dramatically improve your bottom line. 

Customer retention in 2025 is about smarter servicing, and that’s why our platforms are built for servicers, by servicers, to help create better outcomes and turn retention from a challenge into a competitive edge. 

We help servicers anticipate borrower needs, respond instantly, and drive deeper engagement—every step of the way. Want to see what retention-ready servicing looks like? Let’s talk. 

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