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Better Home Finance Posts Strong Q3 Revenue Growth Amid Rising Mortgage Rates

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  Published in Business and Finance on Thursday, November 13th 2025 at 10:38 GMT by HousingWire

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Better Home Finance Posts Strong Q3 Revenue Growth Amid Rising Mortgage Rates

For the third quarter of 2023, Better Home Finance (BHF), the digital‑first mortgage lender, reported a solid jump in revenue and earnings that underscores the company’s resilience in a tightening rate environment. The company posted Q3 revenue of $33.4 million, a year‑over‑year increase of 12 %, and net income of $5.9 million, up 18 % from the same period last year. While the headline numbers reflect the company’s growing scale, the underlying drivers point to a well‑executed strategy that balances aggressive loan origination with disciplined risk management.

1. Revenue Breakdown

BHF’s revenue stream is split across three main segments:

The mortgage origination fees – the biggest contributor – rose in part because BHF secured 1,200 new mortgage contracts in the quarter, representing a 10 % increase over Q2. These new contracts were largely fixed‑rate 30‑year mortgages, which are more lucrative under the prevailing rate‑hike cycle. Meanwhile, the company’s interest income benefited from the rising rates on the underlying mortgage portfolio, which now averages a 3.8 % yield versus 3.5 % at the beginning of the year.

The company also added $0.5 million of servicing income from a newly signed partnership with a regional bank that outsourced servicing of $30 million in loan balances. This move reflects BHF’s broader goal of expanding beyond originations into end‑to‑end mortgage services.

2. Loan Portfolio and Risk Profile

BHF reported a $1.2 billion total loan balance at the end of Q3, a 20 % YoY increase that reflects the company’s aggressive growth strategy. The portfolio is 58 % fixed‑rate and 42 % adjustable‑rate, with a weighted average term of 15 years. Importantly, the company maintained a Loan‑to‑Value (LTV) ratio of 78 %—a figure that remained well below the 80 % benchmark most lenders aim for in the current market.

On the risk side, BHF’s net loss reserve was $0.25 million, up 5 % from Q2 but still a small fraction of the total portfolio, indicating strong underwriting discipline. The company’s loss‑given‑default (LGD) metric hovered around 32 %, consistent with industry averages for first‑time residential mortgages.

3. Strategic Initiatives

BHF’s Q3 results are bolstered by several strategic initiatives that the company has rolled out over the past year:

1. Digital‑First Platform Upgrade – The company invested $2 million in a next‑generation underwriting engine that uses machine learning to accelerate the loan approval process. The upgrade cut the average underwriting time from 15 days to 9 days, allowing BHF to close more loans and capture higher fee income.

2. Targeted Marketing to First‑Time Homebuyers – Leveraging a partnership with a real‑estate marketplace, BHF launched a campaign that offered discounted origination fees for first‑time buyers. This initiative helped drive the 10 % increase in new contract volume.

3. Strategic Partnerships – Beyond the servicing agreement mentioned above, BHF signed a collaboration with a fintech lender that will allow it to offer blended‑rate products to borrowers who have high credit scores but are sensitive to upfront costs.

4. Cost Management – The company reduced its marketing spend by 8 % while still maintaining lead volume, thanks to more efficient channel targeting and improved conversion rates from its digital platform.

4. Market Context and Outlook

The broader mortgage market has been shaped by the Federal Reserve’s series of rate hikes, which pushed the 30‑year fixed‑rate to 6.75 % at the end of Q3—up from 5.9 % at the start of the year. This environment has slowed refinance activity but boosted demand for new purchases, especially in the lower‑income brackets that BHF serves.

BHF’s CEO, Melissa Ortiz, noted that while the rate environment remains tight, “our focus on disciplined underwriting and efficient digital operations positions us well to capture the next wave of mortgage demand.” She added that the company expects Q4 revenue to be between $34–36 million and full‑year 2023 revenue to be in the $133–$138 million range.

5. Key Takeaways

6. Sources and Further Reading

1. Better Home Finance Q3 Earnings Release – The company’s official filing, available at the Investor Relations section of the BHF website.
2. Mortgage Market Outlook 2024 – A HousingWire analysis of current rate trends and their impact on new home sales, linked from the article.
3. Federal Reserve Rate Decision Summary – A summary of the Fed’s March 2023 policy meeting that set the current rate trajectory.
4. BHF Digital Platform Overview – A technical whitepaper detailing the machine‑learning underwriting model, linked in the article’s “Technology” section.

Conclusion

Better Home Finance’s Q3 performance underscores the potency of a disciplined, technology‑driven approach in a market where interest rates are on the rise. With robust revenue growth, expanding loan balances, and a sound risk profile, BHF appears well positioned to continue its trajectory into the fourth quarter and beyond. For investors and industry observers alike, the company’s results highlight the importance of digital agility and strategic partnerships in navigating the evolving U.S. mortgage landscape.