Business, Finance & Tech
Mortgage Rates Drop: Is Now the Right Time to Refinance?
Mortgage rates are finally showing signs of relief, and financial experts say the dip could bring new opportunities for homeowners and potential buyers.
For much of the past year, high rates and steep housing costs kept many Americans from pursuing the dream of homeownership. According to Lawrence Yoon with the National Association of Realtors, home prices aren’t expected to fall soon, but lower interest rates will at least make buying more affordable.
As of last week, Freddie Mac reported the average 30-year fixed mortgage rate at 6.3%, down from more than 7% in mid-January. That decline has many homeowners wondering if now is the time to refinance.
Stephen Cates with Bankrate says the answer depends on the gap between your current rate and the new one you can lock in. “The bigger spread that you could have between the rate you have now and the rate you’ll get in the future, the faster that breakeven point is going to arrive,” Cates explained.
Still, refinancing comes at a cost. It typically runs between 2% and 6% of the new loan amount, plus closing fees and other expenses. “You’re essentially rerunning an entire contract for your home,” Cates said, stressing that homeowners need to crunch the numbers carefully.
If rates continue to fall, waiting could offer more savings. For those considering refinancing now, experts recommend shopping around for the best rate rather than sticking with your current lender. A strong credit score will also increase your chances of getting a better deal.
While refinancing isn’t the right move for everyone, experts agree it can be a smart financial decision for homeowners who locked in mortgages at peak rates and plan to stay in their homes long enough to offset the upfront costs.
Credit: CNN Newsource
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By: NBC Palm Springs
September 29, 2025
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