Frost Bank: $0 Down & Low Rates Fuel Texas Home Loan Comeback

For years, many Texans have been watching from the sidelines, waiting for the right moment to jump into the housing market. Rising interest rates and fluctuating home prices have created a sense of uncertainty, but a familiar name is aiming to change that. Frost Bank, a Texas institution with deep roots in the state’s financial landscape, is making a significant comeback into the mortgage business, offering a compelling proposition: $0 down home loans and rates that undercut the competition. This isn’t just a return to a previous service offering; it’s a strategic move designed to address the current challenges facing potential homebuyers and re-establish Frost as a key player in the Texas housing market.

A Return After Two Decades

Frost Bank famously exited the mortgage business back in 2000, a decision that left many wondering if they’d ever re-enter the fray. For over two decades, the bank focused on other financial services – insurance, investments, deposits, and loans – building a strong foundation of customer relationships. Now, Senior Vice President of Frost Mortgage, Beverly Hankinson, explains the shift, stating, “Here we are 20 years later, and we have really built our company on helping folks…your home is your largest investment. And we knew it was the time to come back in and support our folks out. We just wanted to do it a little bit differently.” That “different” approach centers around competitive rates and innovative financing options, like the $0 down mortgage.

The Appeal of Zero Down and Lower Rates

The biggest hurdle for many prospective homebuyers in Texas is the down payment. As home prices have surged, the 20% traditionally required has become increasingly difficult to accumulate. Frost’s $0 down mortgage, coupled with the Frost Progress Mortgage offering $4,000 in closing cost assistance, directly addresses this challenge. But the savings don’t stop there. Frost is actively undercutting competitors’ rates, typically falling one-eighth to one-quarter of a percent below the average. While that might seem like a small difference, the long-term impact is substantial. Using recent Texas home price data from Texas A&M University and prevailing mortgage rates from Freddie Mac, a reduction of just 1/8 of a percent can save a homeowner nearly $10,000 in interest over the life of a 30-year loan, while a quarter percent reduction saves over $19,000.

Addressing the Sideline Sitters

Frost’s re-entry comes at a time when a growing number of people are hesitant to buy. Surveys from 2023, 2024, and 2025 consistently show an increasing percentage of potential homebuyers waiting for rates to fall. Frost is hoping to entice these “sideline sitters” with its attractive offerings. The bank isn’t just offering competitive rates; they’re actively courting customers who already have existing relationships with Frost, offering additional discounts to those who bundle their financial services. This strategy, Hankinson explains, is about “experiencing Frost” and fostering long-term relationships.

Beyond the Rate: A Relationship-Focused Approach

What sets Frost apart isn’t just the numbers, but their commitment to customer service and long-term relationships. Unlike many lenders who sell off their loans to servicers, Frost plans to service the mortgages they originate for the life of the loan. This means borrowers will have direct access to a Frost banker throughout the entire process, fostering a sense of trust, and accountability. Hankinson emphasizes, “We don’t like people getting between us and our customers, and we really aim for this relationship.” This approach is particularly appealing in a market where many borrowers perceive disconnected from their lenders.

Impact and Goals

Frost’s return to the mortgage market has already made waves. In 2025, the bank exceeded its goal of $500 million in Texas home loans, originating $594 million. Looking ahead, Frost is aiming even higher, with a target of $850 million in mortgage loans by the end of 2026. While this figure represents a relatively small portion of the overall Texas mortgage market – almost $114 billion was approved in 2024 – it’s an ambitious start for a bank re-entering the game after a two-decade hiatus. The bank’s aggressive pricing and customer-centric approach have already caught the attention of competitors, potentially leading to even more favorable conditions for homebuyers across the state.

Navigating the Texas Housing Market: A Local Resource Guide

Given my background in financial journalism and observing the Texas real estate market, if these trends impact you in the Austin, Texas area, here are three types of local professionals you should consider consulting:

1. Independent Mortgage Brokers

While Frost Bank’s offerings are attractive, it’s always wise to shop around. Independent mortgage brokers can access a wider range of loan products from multiple lenders, ensuring you find the best fit for your specific financial situation. Look for brokers with a proven track record, transparent fee structures, and a strong understanding of the local Austin market. Check online reviews and ask for referrals from friends and family.

2. Real Estate Attorneys

Navigating the complexities of a real estate transaction requires legal expertise. A qualified real estate attorney can review contracts, ensure a smooth closing process, and protect your interests. In Austin, where the market can be particularly competitive, having an attorney on your side is invaluable. Seek attorneys specializing in residential real estate with experience in Travis County.

3. Financial Advisors

Buying a home is a significant financial decision. A financial advisor can help you assess your overall financial health, create a budget, and determine how a mortgage fits into your long-term financial goals. Look for advisors with certifications like Certified Financial Planner (CFP) and experience working with homebuyers in the Austin area. They can provide personalized guidance and help you make informed decisions.

Ready to find trusted professionals? Browse our complete directory of top-rated financial experts in the Austin area today.