Frost Bank makes an aggressive return to home loans in Texas, offering a $0 down home loan and highly competitive interest rates.
Have you been sitting on the sidelines? If you look at surveys in 2023, 2024, and 2025, it is evident that an increasing percentage of people have been sideline sitting; waiting for mortgage rates to come down so they can afford to buy a home.
Well, some of them might be drawn in by Texas-based Frost Bank, which got out of mortgages in the year 2000 and also sat on the sidelines for more than two decades. But Frost is back in the mortgage game.
Frost returns to mortgages
Senior Vice President of Frost Mortgage Beverly Hankinson explains, “Here we are 20 years later, and we have really built our company on helping folks with their insurance, their investments, their deposits, their loans, and your home is your largest investment. And we knew it was the time to come back in and help our folks out. We just wanted to do it a little bit differently.”
Just one little problem: “We’ve told people for 20 years we don’t do mortgages”. After so much time, they had to figure out a way to bring borrowers back. One way the bank did that was reflected in this post from Frost last year, touting mortgage rate offerings .50% below their competitors.
Competitive offerings
Hankinson says the Frost mortgage rate typically falls one-eighth to one-quarter of a percent below competitors’ rates. Using a recent average Texas home price and a recent average mortgage rate, and assuming a down payment of 20%, shaving off just 1/8 of a percent drops the monthly payment by $27 and saves you almost $10,000 in interest over 30 years.
Knocking off a quarter percent lowers the monthly payment by more than $50 per month and reduces total interest paid by about $19,000.
Hankinson says, “We’re really trying to get people to experience Frost. And so, we’ve taken the approach that we want to be very competitive.”
As home prices in Texas have soared, the 20% you would normally have to offer in a down payment has gone way up, too. Of course, depending on the type of loan, many who can’t muster that 20% down payment end up having to pay private mortgage insurance, or PMI, each month.
Here is the most recent list showing the Area Median Income (AMI) in different markets. Households with a combined income of less than 80% of AMI can qualify for the Frost Progress Mortgage.
The bank touts that as a loan that offers a competitive rate plus $4,000 in closing cost assistance. And importantly, Hankinson says the loan can be 100% financed with no down payment, without any requirement to pay PMI, “And when you again take that mortgage insurance out of the equation, that can sometimes be $150 to $200 a month for an individual toward their payments”.
Hankinson says customers who have other kinds of accounts with Frost can see additional benefits. “We are a relationship bank, and we value relationships. And so, we do give a discount on top of our already competitive rates with folks that have a relationship with us. And we’re using this a little bit as an acquisition strategy.”
Goals and perspective
Last year, the bank set a goal of making $500 million in Texas home loans. They shot past that goal. Hankinson says Frost hit $594 million in mortgage loans in 2025. And she adds that this year the bank is aiming even higher, “Hopefully getting to about $850 million by the end of this year. And I think we’re going to do it. I feel very confident.”
For perspective, that big number is much smaller when you consider there was almost $114 billion in mortgages approved in Texas just in 2024. But this is still an ambitious beginning for a bank that has come off the sidelines.
And Hankinson says their competitors have taken notice of their aggressive offerings, which could benefit you even if you don’t get a mortgage with Frost, “We have seen some lenders that have questioned, is it real? Is it true? Is this really what you’re doing? I think the phrase is imitation is the highest form of flattery, right? So, we’re seeing folks that are looking at what we’re doing and try to emulate that or mimic that. I think the difference is truly this is our DNA. This is how we do things every single day.”
Renting versus buying
Many people may not be as desperate to buy a home because rents have cooled significantly from their peaks several years ago. According to this analysis from realtor.com, rents are down significantly from their peaks in major Texas cities:
Austin -18.2%
Houston -6.3%
D-FW -10.1%
San Antonio -12.6%
Still, experts say if you are eager to own a home, figure out what you need, where you want to live, and what payment you can comfortably afford. And then see what is possible because they say there will never be perfect rates, perfect prices, and a perfect time to buy.
And Hankinson cautions that a home that checks all your boxes might be available now…and might not be later, “That home may not be there. This is the time. And if you’re sitting on the sidelines, there’s a missed opportunity. So, you will always have the chance to refinance.”
Hankinson says Frost has been lending to many borrowers who earn significantly less than the median income, “30-percent of the loans that we did last year were to the low-income community. And that outranks and outperforms other lenders out there that are about 18%, 20%. And typically, that’s a segment that people shy away from. We have embraced it.”
And she says the bank has not seen an uptick in slow payers who are a little late or delinquent borrowers, whose mortgage payment is a lot late.
Finally, Hankinson says another big commitment the bank is making is to make the loans and then service them rather than sell them to other servicers, “Again, we don’t like people getting between us and our customers, and we really want this relationship. You’ve got 30 years potentially with this mortgage. We want you to pick up the phone and talk to a Frost banker. And so, we’ve made the decision that we are going to service these loans for the life of the loan.”