Applications for US mortgages surged last week as banks lowered borrowing costs after the Federal Reserve’s decision to buy Treasuries pushed interest rates to record lows.

The Mortgage Bankers’ Association’s index of applications to buy a home or refinance a loan soared 32% for the week ended 20 March, as the interest rate on a 30-year fixed rate mortgage plunged to a record low of 4.63%.

The low rates prompted homeowners to refinance their mortgages to trim monthly payments. The MBA’s refinancing index surged 42% and its purchase index gained 4.2%.

Financial Times