But it appears adjustable-rate mortgage (ARM) deals are making a comeback as homebuyers try to ease the pain of soaring loans.
ARM deals offer a fixed-rate interest for a set period of time, typically five, seven or ten years. After that it resets in-line with the current market rate.
According to figures from the Mortgage Bankers Association (MBA), 9.2 percent of all loan applications were for ARM deals last week.
It is the highest proportion of buyers to sign up to the deals since November 2022, when rates were also over 7 percent. Rates on a fixed-rate 30-year loan are now hovering at a two-decade high of 7.57 percent, data from the government-backed lender Freddie Mac shows.
But separate figures from the MBA shows the rate on a 5/1 ARM loan dropped from 6.49 percent to 6.33 percent - making them more appealing to buyers. Stronger regulations have also made ARMs less risky than they were in the early 2000s.
MBA CEO Bob Broeksmit said: 'Mortgage applications increased for the first time in three weeks, pushed higher by a 15 percent jump in ARM applications.
'With mortgage rates well above 7 percent, some prospective homebuyers are turning to ARMs to lower their monthly payment in the short term amidst these high mortgage rates.'