Mortgage rateshave been frustratingly high this year, leaving current homeowners with little financialincentive to refinance.
But theoutlook for 2025is cloudier.
Higher inflation and fewer Fed cuts could keep upward pressure on borrowing costs for homeowners.
For more on what experts are forecasting in the mortgage refinance market, check out ourweekly mortgage rate forecast.
But then the script flipped.
In early October, strong inflation andlabor dataforced bond market investors to reconsider the pace of additional rate cuts.
Bond yields and mortgage rates quickly rebounded, with average30-year fixed mortgage ratesclimbing to around 7%.
Experts still expect the Fed to cut rates by 0.25% on Dec. 18.
For homeowners, another rate cut won’t automatically result inlower mortgage refinance rates.
Given that average refinance rates are hovering around 6.75%, very few homeowners are jumping into the market.
However,homeowners with rates near 8%and higher can save money on their monthly payments by refinancing.
But it all depends on future economic data.
With a traditional refinance, your new home loan will have a different term and/or interest rate.
But refinancing your mortgage isn’t free.
(A basis point is equivalent to 0.01%.)
A 10-year refinance typically has the lowest interest rate but the highest monthly payment of all refinance terms.
And don’t forget to speak with multiple lenders and shop around.
Reasons to refinance
Homeowners usually refinance to save money, but there areother reasonsto do so.
Here are the most common reasons homeowners refinance:
