The interest rate for the most popular U.S. home loan ticked down to 6.13% last week, the lowest in about two years, and refinancing activity jumped, data from the Mortgage Bankers Association showed today.

The average contract rate on a 30-year fixed-rate mortgage dropped 2 basis points in the week ended Sept. 20, the data showed, a far smaller move than the half-of-a-percentage point policy rate cut delivered by the Federal Reserve last week.

Mortgage rates had been falling for weeks in anticipation of the Fed’s move, however, and are now down more than three-quarters of a percentage point compared with July, and more than 1.75 percentage points compared with the October 2023 peak.

Applications to refinance existing home loans jumped as homeowners took advantage of the decline in home loan rates in recent months to trim their regular house payments. Refinancing now accounts for more than 57% of all mortgage applications, the data show, above the historic median of 48%.