Aug 24 (Reuters) - Shares in online mortgage lender Better's new public listing plummeted on Thursday as investors fretted over record-high mortgage rates.

Better, whose stock was down 92% at $1.33 in early Nasdaq trading, went public via a merger with blank-check company Aurora Acquisition Corp, a deal that was first announced in 2021 but delayed amid a U.S. Securities and Exchange Commission (SEC) inquiry and multiple rounds of layoffs, regulatory filings show.

In the interim, roughly 95% of Aurora shareholders redeemed their holdings, leaving the trust account with just about $24 million at the end of June from about $283 million. Aurora went public in March 2021.

The deal will provide Better with an infusion of $550 million from SoftBank, which it will use to expand its mortgage product offerings in anticipation of a boom in demand for refinancings next year, when rates are expected to start falling, Better executives said.

"We think that this is a really great time for us to be out there, capitalized with an additional $550 million from SoftBank that will enable the company to continue to innovate and serve its customers," CEO Vishal Garg said in an interview.

Better is going public as U.S. mortgage rates continue to surge, with the popular 30-year fixed rate last week hitting the highest level since December 2000, helping drive mortgage applications to a 28-year low, the Mortgage Bankers Association said on Wednesday.

(Reporting by Hannah Lang and Lance Tepper in Washington; Editing by Mark Porter)