Mortgage applications rose 9.3% this past week as borrowers refinanced their home loans at exceptionally low interest rates.

The Mortgage Bankers Association said refinancing apps grew dramatically, with the refi index jumping 11.2%, after the Fed announced it would move its portfolio towards longer-term Treasury securities.

Meanwhile, the purchase index grew 2.6%, suggesting an increase in new home applications at the lower interest rates.

"With lower rates, refinance application volume increased to its highest level since August 19, 2011," said Mike Fratantoni, the MBA's vice president of research and economics. "Purchase application volume also increased. However, the increase was in conventional purchase applications, which were up by 4.9 percent. Purchase applications for government loans fell by 0.6 percent over the week, likely influenced by the pending decline in FHA loan limits."

The refinancing share of mortgage activity grew to 79.7% of all applications, up from 78.3% the previous week.

The average interest rate for 30-year fixed rate mortgages with conforming loan balances of $417,500 or less fell to 4.25% from 4.29% this past week. Meanwhile, the average contract interest rate for 30-year, fixed-rate mortgages with jumbo loan balances fell to 4.51% from 4.55%.

In addition, the interest rate for 30-year fixed-rate mortgages backed by the FHA fell to 4.05 percent from 4.07 percent.

The 15-year, FRM increased to 3.47% from 3.46%, while the average contract interest rate for 5/1 ARMs fell to 2.95% fro 2.96%.