{"id":32957,"date":"2025-10-30T14:09:15","date_gmt":"2025-10-30T18:09:15","guid":{"rendered":"https:\/\/www.finhabits.com\/?p=32957"},"modified":"2025-10-30T14:09:15","modified_gmt":"2025-10-30T18:09:15","slug":"interest-rates-and-home-buying-how-to-decide-between-buying-or-refinancing-in-2025","status":"publish","type":"post","link":"https:\/\/www.finhabits.com\/interest-rates-and-home-buying-how-to-decide-between-buying-or-refinancing-in-2025\/","title":{"rendered":"Interest rates and home buying: How to decide between buying or refinancing in 2025"},"content":{"rendered":"<p><span style=\"font-weight: 400;\">After two years of volatility, <\/span><b>interest rates are finally trending lower<\/b><span style=\"font-weight: 400;\"> \u2014 and many homeowners and buyers are wondering how much further they might fall.<\/span><span style=\"font-weight: 400;\"><br \/>\n<\/span><span style=\"font-weight: 400;\">Should you lock in now or wait for another drop? The answer depends on how a lower rate affects your monthly payment, total cost, and financial stability.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Example: a $400,000 loan at 7% costs about <\/span><b>$2,661\/month <\/b><span style=\"font-weight: 400;\">in principal and interest.<\/span><span style=\"font-weight: 400;\"><br \/>\n<\/span><span style=\"font-weight: 400;\">At 6%, it drops to <\/span><b>$2,397\/month<\/b><span style=\"font-weight: 400;\"> \u2014 a savings of roughly <\/span><b>$264\/month <\/b><span style=\"font-weight: 400;\">or <\/span><b>$3,168\/year<\/b><span style=\"font-weight: 400;\">.<\/span><span style=\"font-weight: 400;\"><br \/>\n<\/span><span style=\"font-weight: 400;\">That difference shows why timing and preparation matter: understanding how rates shape your budget helps you decide whether <\/span><b>buying or refinancing in 2025 <\/b><span style=\"font-weight: 400;\">makes sense for you.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The key decision: your <\/span><b>monthly comfort today <\/b><span style=\"font-weight: 400;\">versus your <\/span><b>total cost and stability long term<\/b><span style=\"font-weight: 400;\">.<\/span><\/p>\n<h3><b>In Brief<\/b><\/h3>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Your mortgage rate drives both your monthly payment and total interest cost.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Refinancing makes sense when your savings exceed closing costs within your time in the home.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Points and loan terms affect your rate \u2014 always calculate your break-even point.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Consider your budget, job stability, and how long you plan to stay before you buy or refinance.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Follow Federal Reserve decisions \u2014 don\u2019t chase daily headlines.<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">When rates rise or fall, the dream of owning a home can feel closer or further away.<\/span><span style=\"font-weight: 400;\"><br \/>\n<\/span><span style=\"font-weight: 400;\">If you\u2019re wondering whether to wait, buy now, or refinance for a lower payment \u2014 you\u2019re not alone.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The interest rate isn\u2019t just a number \u2014 it\u2019s the <\/span><b>steering wheel <\/b><span style=\"font-weight: 400;\">of your home-buying plan. It moves your monthly payment, the total cost of your loan, and your peace of mind.<\/span><span style=\"font-weight: 400;\"><br \/>\n<\/span><span style=\"font-weight: 400;\">This guide breaks down the essentials with clear examples and realistic numbers so you can decide whether to buy, refinance, or pause.<\/span><\/p>\n<h2><b>What are interest rates \u2014 and why they matter<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">A mortgage is a long-term loan. The interest rate is simply the price of that money over time.<\/span><span style=\"font-weight: 400;\"><br \/>\n<\/span><span style=\"font-weight: 400;\">A higher rate increases your monthly payment and the total interest you\u2019ll pay over decades.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Think of the rate as the <\/span><b>thermostat<\/b><span style=\"font-weight: 400;\"> of your budget \u2014 a single degree up or down changes how everything feels.<\/span><span style=\"font-weight: 400;\"><br \/>\n<\/span><span style=\"font-weight: 400;\">In practice, that degree can mean the difference between affording a $450,000 home or needing to step down to $410,000 to keep the same payment.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Watch two key signals: <\/span><b>Federal Reserve policy decisions <\/b><span style=\"font-weight: 400;\">and <\/span><b>weekly mortgage market trends <\/b><span style=\"font-weight: 400;\">(see Freddie Mac\u2019s Primary Mortgage Market Survey).<\/span><\/p>\n<h2><b>Why rates matter now: 2025 in context<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">Inflation, employment, and Fed policy all influence mortgage rates.<\/span><span style=\"font-weight: 400;\"><br \/>\n<\/span><span style=\"font-weight: 400;\">In 2024\u20132025, we\u2019ve seen plenty of ups and downs \u2014 changes aren\u2019t always linear. A rate drop may take longer than expected, and a spike can happen quickly.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Here\u2019s where many people get stuck: waiting for the \u201cperfect rate\u201d can mean <\/span><b>years of rent <\/b><span style=\"font-weight: 400;\">and <\/span><b>higher home prices later<\/b><span style=\"font-weight: 400;\">.<\/span><span style=\"font-weight: 400;\"><br \/>\n<\/span><span style=\"font-weight: 400;\">Instead of chasing headlines, measure your reality:<\/span><span style=\"font-weight: 400;\"><br \/>\n<\/span><span style=\"font-weight: 400;\">Do you have job stability, an emergency fund, and enough savings for your monthly payment and closing costs?<\/span><\/p>\n<h2><b>How mortgage rates work<\/b><\/h2>\n<h3><b>The basics<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">Your monthly principal-and-interest payment depends on three factors:<\/span><\/p>\n<ol>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Loan amount<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Interest rate<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Loan term (years)<\/span><\/li>\n<\/ol>\n<p><span style=\"font-weight: 400;\">A lower rate reduces your payment and helps you build equity faster.<\/span><\/p>\n<p><b>Example:<\/b><b><br \/>\n<\/b><span style=\"font-weight: 400;\">For a $400,000 loan over 30 years:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">At 7% \u2192 \u2248 <\/span><b>$2,661\/month<\/b><span style=\"font-weight: 400;\"> (P&amp;I only)<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">At 6% \u2192 \u2248 <\/span><b>$2,397\/month<\/b><b><br \/>\n<\/b><span style=\"font-weight: 400;\">Difference: \u2248 <\/span><b>$264\/month<\/b><span style=\"font-weight: 400;\"> or <\/span><b>$3,168\/year<\/b><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Over 5 years, that\u2019s nearly <\/span><b>$15,840 saved<\/b><span style=\"font-weight: 400;\">.<\/span><span style=\"font-weight: 400;\"><br \/>\n<\/span><span style=\"font-weight: 400;\">(Remember: property taxes and insurance also affect your total payment, though they aren\u2019t tied to your rate.)<\/span><\/p>\n<h2><b>Fixed vs. adjustable rates (ARMs)<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">A <\/span><b>fixed-rate mortgage<\/b><span style=\"font-weight: 400;\"> gives you a stable payment for the entire term.<\/span><span style=\"font-weight: 400;\"><br \/>\n<\/span><span style=\"font-weight: 400;\">An <\/span><b>adjustable-rate mortgage (ARM)<\/b><span style=\"font-weight: 400;\"> starts lower but can rise after an initial fixed period (for example, a 5\/1 ARM).<\/span><\/p>\n<p><span style=\"font-weight: 400;\">If you expect your income to grow or plan to move before the adjustment, an ARM may make sense.<\/span><span style=\"font-weight: 400;\"><br \/>\n<\/span><span style=\"font-weight: 400;\">If you value stability, a fixed rate is usually safer.<\/span><\/p>\n<h2><b>Points, credits, and loan terms<\/b><\/h2>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Paying <\/span><b>points <\/b><span style=\"font-weight: 400;\">lowers your rate (1 point \u2248 1% of the loan amount).<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Taking a <\/span><b>lender credit <\/b><span style=\"font-weight: 400;\">raises your rate but reduces closing costs.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Shortening the term (30\u219215 years) lowers your rate and total interest but raises the monthly payment.<\/span><\/li>\n<\/ul>\n<p><b>Example:<\/b><b><br \/>\n<\/b><span style=\"font-weight: 400;\">On a $400,000 loan, 1 point costs $4,000 and could lower your rate from 7.00% to 6.75%.<\/span><span style=\"font-weight: 400;\"><br \/>\n<\/span><span style=\"font-weight: 400;\">At 7% \u2192 $2,661\/month<\/span><span style=\"font-weight: 400;\"><br \/>\n<\/span><span style=\"font-weight: 400;\">At 6.75% \u2192 $2,594\/month<\/span><span style=\"font-weight: 400;\"><br \/>\n<\/span><span style=\"font-weight: 400;\">Savings \u2248 $67\/month<\/span><span style=\"font-weight: 400;\"><br \/>\n<\/span><span style=\"font-weight: 400;\">Break-even: $4,000 \u00f7 $67 \u2248 <\/span><b>60 months (5 years)<\/b><b><br \/>\n<\/b><span style=\"font-weight: 400;\">If you won\u2019t stay that long, skip the points.<\/span><\/p>\n<h3><b>Comparison: Fixed vs. adjustable vs. short-term loan<\/b><\/h3>\n<table>\n<tbody>\n<tr>\n<td><b>Factor<\/b><\/td>\n<td style=\"text-align: center;\"><b>30-Year Fixed<\/b><\/td>\n<td style=\"text-align: center;\"><b>5\/1 ARM<\/b><\/td>\n<td style=\"text-align: center;\"><b>15-Year Fixed<\/b><\/td>\n<\/tr>\n<tr>\n<td>Initial payment ($400k)<\/td>\n<td style=\"text-align: center;\"><span style=\"font-weight: 400;\">\u2248 $2,661<\/span><\/td>\n<td style=\"text-align: center;\"><span style=\"font-weight: 400;\">\u2248 $2,450<\/span><\/td>\n<td style=\"text-align: center;\"><span style=\"font-weight: 400;\">\u2248 $3,400<\/span><\/td>\n<\/tr>\n<tr>\n<td>Payment stability<\/td>\n<td style=\"text-align: center;\"><span style=\"font-weight: 400;\">Full term<\/span><\/td>\n<td style=\"text-align: center;\"><span style=\"font-weight: 400;\">5 years, then adjusts<\/span><\/td>\n<td style=\"text-align: center;\"><span style=\"font-weight: 400;\">Full term<\/span><\/td>\n<\/tr>\n<tr>\n<td>Total interest paid<\/td>\n<td style=\"text-align: center;\"><span style=\"font-weight: 400;\">\u2248 $560,000<\/span><\/td>\n<td style=\"text-align: center;\"><span style=\"font-weight: 400;\">Variable<\/span><\/td>\n<td style=\"text-align: center;\"><span style=\"font-weight: 400;\">\u2248 $210,000<\/span><\/td>\n<\/tr>\n<tr>\n<td>Best for<\/td>\n<td style=\"text-align: center;\"><span style=\"font-weight: 400;\">Long-term stability<\/span><\/td>\n<td style=\"text-align: center;\"><span style=\"font-weight: 400;\">Moving within 5\u20137 years<\/span><\/td>\n<td style=\"text-align: center;\"><span style=\"font-weight: 400;\">Higher income, max savings<\/span><\/td>\n<\/tr>\n<tr>\n<td>Payment risk<\/td>\n<td style=\"text-align: center;\"><span style=\"font-weight: 400;\">None<\/span><\/td>\n<td style=\"text-align: center;\"><span style=\"font-weight: 400;\">High after adjustment<\/span><\/td>\n<td style=\"text-align: center;\"><span style=\"font-weight: 400;\">None<\/span><\/td>\n<\/tr>\n<tr>\n<td>Budget flexibility<\/td>\n<td style=\"text-align: center;\"><span style=\"font-weight: 400;\">High<\/span><\/td>\n<td style=\"text-align: center;\"><span style=\"font-weight: 400;\">Medium-low<\/span><\/td>\n<td style=\"text-align: center;\"><span style=\"font-weight: 400;\">Low<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<h2><b>Refinancing: When it makes sense \u2014 and when it doesn\u2019t<\/b><\/h2>\n<h3><b>The rule of thumb \u2014 and the real filter<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">A common rule says: <\/span><i><span style=\"font-weight: 400;\">if you can lower your rate by 0.5\u20131 percentage point, refinancing might be worth it.<\/span><\/i><i><span style=\"font-weight: 400;\"><br \/>\n<\/span><\/i><span style=\"font-weight: 400;\">That\u2019s a decent signal, but the <\/span><b>real test <\/b><span style=\"font-weight: 400;\">is your <\/span><b>break-even point<\/b><span style=\"font-weight: 400;\"> \u2014 the number of months it takes for your monthly savings to cover your closing costs.<\/span><\/p>\n<p><b>Example:<\/b><b><br \/>\n<\/b><span style=\"font-weight: 400;\">You refinance $350,000 from 7.25% to 6.25%.<\/span><span style=\"font-weight: 400;\"><br \/>\n<\/span><span style=\"font-weight: 400;\">Monthly savings (P&amp;I): \u2248 $225<\/span><span style=\"font-weight: 400;\"><br \/>\n<\/span><span style=\"font-weight: 400;\">Closing costs: $6,000<\/span><span style=\"font-weight: 400;\"><br \/>\n<\/span><span style=\"font-weight: 400;\">Break-even: $6,000 \u00f7 $225 \u2248 <\/span><b>27 months (2.3 years)<\/b><\/p>\n<p><span style=\"font-weight: 400;\">If you\u2019ll stay longer and your cash flow improves, it makes sense.<\/span><span style=\"font-weight: 400;\"><br \/>\n<\/span><span style=\"font-weight: 400;\">If you\u2019ll sell sooner, you\u2019ll lose money.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Extending your term to lower your payment can help your short-term budget but increases total interest \u2014 weigh that trade-off carefully.<\/span><\/p>\n<h2><b>What lenders look for<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">Lenders evaluate your <\/span><b>credit history, income stability, debt-to-income ratio (DTI), home value (appraisal)<\/b><span style=\"font-weight: 400;\">, and <\/span><b>down payment or equity<\/b><span style=\"font-weight: 400;\">.<\/span><span style=\"font-weight: 400;\"><br \/>\n<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Lower risk for the lender usually means better rates for you.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">A well-organized file helps: pay stubs, tax returns, bank statements, employment history, and explanations for any unusual deposits.<\/span><span style=\"font-weight: 400;\"><br \/>\n<\/span><span style=\"font-weight: 400;\">For a detailed breakdown of the process, see the CFPB\u2019s <\/span><i><span style=\"font-weight: 400;\">Owning a Home<\/span><\/i><span style=\"font-weight: 400;\"> guide.<\/span><\/p>\n<h2><b>How to decide: The \u201c3P\u201d framework<\/b><\/h2>\n<p><b>Payment<\/b><span style=\"font-weight: 400;\"> \u2013 Calculate your total monthly payment with the current rate, points, and term.<\/span><span style=\"font-weight: 400;\"><br \/>\n<\/span><b>Permanence<\/b><span style=\"font-weight: 400;\"> \u2013 Estimate how long you plan to stay in the home.<\/span><span style=\"font-weight: 400;\"><br \/>\n<\/span><b>Protection<\/b><span style=\"font-weight: 400;\"> \u2013 Make sure you have an emergency fund and adequate insurance.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">If all three \u201cPs\u201d align, you\u2019re ready to move forward.<\/span><span style=\"font-weight: 400;\"><br \/>\n<\/span><span style=\"font-weight: 400;\">If one falls short, adjust your plan: lower your price range, improve your credit, save more for a down payment \u2014 or wait.<\/span><\/p>\n<h2><b>Risks you shouldn\u2019t ignore<\/b><\/h2>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">An adjustable rate in an inflationary period can drive your payment up.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Refinancing to a longer term can reduce your payment today but increase your total interest cost.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">A payment that\u2019s too tight leaves no room for unexpected expenses.<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Another common mistake: <\/span><b>chasing rates and forgetting the rest.<\/b><b><br \/>\n<\/b><span style=\"font-weight: 400;\">Taxes, insurance, maintenance, and HOA fees also matter.<\/span><span style=\"font-weight: 400;\"><br \/>\n<\/span><span style=\"font-weight: 400;\">Always leave breathing room in your monthly budget.<\/span><\/p>\n<h2><b>FAQs<\/b><\/h2>\n<p><b>Should I refinance my home now?<\/b><b><br \/>\n<\/b><span style=\"font-weight: 400;\">Only if your break-even makes sense. Divide your closing costs by your monthly savings. If you\u2019ll stay beyond that number of months \u2014 and your cash flow improves \u2014 it\u2019s worth considering.<\/span><\/p>\n<p><b>How much will my payment drop if my rate falls 1%?<\/b><b><br \/>\n<\/b><span style=\"font-weight: 400;\">On a $400,000 loan over 30 years, lowering from 7% to 6% reduces your payment by \u2248 $264\/month (principal + interest only).<\/span><\/p>\n<p><b>Should I pay points to lower my rate?<\/b><b><br \/>\n<\/b><span style=\"font-weight: 400;\">Only if you\u2019ll stay long enough to recover the cost. Paying 1 point ($4,000 on $400,000) saves \u2248 $67\/month \u2014 about 5 years to break even.<\/span><\/p>\n<p><b>Fixed or adjustable in 2025?<\/b><b><br \/>\n<\/b><span style=\"font-weight: 400;\">If you want long-term stability, go fixed.<\/span><span style=\"font-weight: 400;\"><br \/>\n<\/span><span style=\"font-weight: 400;\">If you\u2019ll move soon and want a lower initial payment, an ARM can work \u2014 but understand how and when it resets.<\/span><\/p>\n<p><b>How can I prepare if I\u2019m not ready to buy yet?<\/b><b><br \/>\n<\/b><span style=\"font-weight: 400;\">Build credit, save for your down payment and closing costs, and practice a \u201cmock payment\u201d by setting aside what you\u2019d pay monthly. The CFPB\u2019s homeownership guides are a great starting point.<\/span><\/p>\n<h2><b>Glossary<\/b><\/h2>\n<p><b>Amortization: <\/b><span style=\"font-weight: 400;\">The repayment structure that gradually reduces principal and interest until the loan is paid off.<\/span><span style=\"font-weight: 400;\"><br \/>\n<\/span><b>APR (Annual Percentage Rate): <\/b><span style=\"font-weight: 400;\">Includes the interest rate plus certain loan costs.<\/span><span style=\"font-weight: 400;\"><br \/>\n<\/span><b>ARM (Adjustable-Rate Mortgage): <\/b><span style=\"font-weight: 400;\">A mortgage with a rate that can change after an initial fixed period.<\/span><span style=\"font-weight: 400;\"><br \/>\n<\/span><b>Closing: <\/b><span style=\"font-weight: 400;\">The final step when you sign and pay closing costs to finalize your loan.<\/span><span style=\"font-weight: 400;\"><br \/>\n<\/span><b>Down payment: <\/b><span style=\"font-weight: 400;\">The cash you contribute upfront when buying a home.<\/span><span style=\"font-weight: 400;\"><br \/>\n<\/span><b>LTV (Loan-to-Value): <\/b><span style=\"font-weight: 400;\">The loan amount compared to the home\u2019s value; it affects your rate.<\/span><span style=\"font-weight: 400;\"><br \/>\n<\/span><b>Points: <\/b><span style=\"font-weight: 400;\">Optional fees (\u22481% of the loan) paid to reduce your rate.<\/span><span style=\"font-weight: 400;\"><br \/>\n<\/span><b>Fixed rate: <\/b><span style=\"font-weight: 400;\">A mortgage with a rate that stays the same for the entire term.<\/span><\/p>\n<h2><b>Learn before you decide \u2014 It could save you thousands<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">Making a good housing decision starts with understanding how your rate interacts with your budget, time horizon, and goals.<\/span><span style=\"font-weight: 400;\"><br \/>\n<\/span><span style=\"font-weight: 400;\">If you want to dig deeper into saving strategies, explore <\/span><i><span style=\"font-weight: 400;\">Buying a Home: Smart Tips to Save.<\/span><\/i><i><span style=\"font-weight: 400;\"><br \/>\n<\/span><\/i><span style=\"font-weight: 400;\">If you\u2019re evaluating a refinance, check <\/span><i><span style=\"font-weight: 400;\">How to Refinance Your Mortgage<\/span><\/i><span style=\"font-weight: 400;\"> for real break-even examples.<\/span><\/p>\n<h2><b>Conclusion<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">Interest rates are <\/span><b>showing signs of easing<\/b><span style=\"font-weight: 400;\">, but no one knows exactly how fast or how far they\u2019ll drop.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Instead of waiting for the \u201cperfect rate,\u201d focus on aligning your decision with your <\/span><b>3P framework \u2014 Payment, Permanence, and Protection.<\/b><b><br \/>\n<\/b><span style=\"font-weight: 400;\">If your numbers work, your job feels stable, and you have a financial cushion, acting while rates are on their way down can give you both stability and flexibility.<\/span><\/p>\n<p><b>The takeaway:<\/b><span style=\"font-weight: 400;\"> The rate is the steering wheel, but <\/span><i><span style=\"font-weight: 400;\">you<\/span><\/i><span style=\"font-weight: 400;\"> choose the timing and direction.<\/span><span style=\"font-weight: 400;\"><br \/>\n<\/span><span style=\"font-weight: 400;\">Design your purchase or refinance around your own milestones \u2014 not the headlines \u2014 and let your long-term goals drive the decision.<\/span><\/p>\n<h3><b>Sources<\/b><\/h3>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><a href=\"https:\/\/www.federalreserve.gov\/monetarypolicy\/fomc.htm\"><span style=\"font-weight: 400;\">Federal Reserve \u2013 Monetary Policy &amp; FOMC<\/span><\/a><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><a href=\"https:\/\/www.consumerfinance.gov\/owning-a-home\/\"><span style=\"font-weight: 400;\">Consumer Financial Protection Bureau \u2013 Owning a Home<\/span><\/a><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><a href=\"https:\/\/www.freddiemac.com\/pmms\"><span style=\"font-weight: 400;\">Freddie Mac \u2013 Primary Mortgage Market Survey<\/span><\/a><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><a href=\"https:\/\/www.hud.gov\/topics\/buying_a_home\"><span style=\"font-weight: 400;\">U.S. Department of HUD \u2013 Buying a Home<\/span><\/a><\/li>\n<\/ul>\n<p><b>Disclaimer:<\/b><b><br \/>\n<\/b><span style=\"font-weight: 400;\">This content is for educational purposes only and does not constitute personalized financial, legal, or tax advice. For guidance specific to your situation, consult a qualified professional. Interest rates vary by lender, credit profile, and market conditions.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>After two years of volatility, interest rates are finally trending lower \u2014 and many homeowners and buyers are wondering how much further they might fall. Should you lock in now or wait for another drop? The answer depends on how a lower rate affects your monthly payment, total cost, and financial stability. Example: a $400,000 [&hellip;]<\/p>\n","protected":false},"author":15,"featured_media":32968,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[638],"class_list":["post-32957","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-learn","tag-cro-en"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v25.9 (Yoast SEO v25.9) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Interest Rates and Home Buying: Should You Buy or Refinance?<\/title>\n<meta name=\"description\" content=\"Interest rates are finally trending lower, Compare how changing mortgage rates affect your payments and decide the best plan for your home.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.finhabits.com\/interest-rates-and-home-buying-how-to-decide-between-buying-or-refinancing-in-2025\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Interest rates and home buying: How to decide between buying or refinancing in 2025\" \/>\n<meta property=\"og:description\" content=\"Finhabits ofrece el servicio de inversiones en la bolsa de valores de los Estados Unidos. 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Es la app financiera #1 en la comunidad latina de USA.","og_url":"https:\/\/www.finhabits.com\/interest-rates-and-home-buying-how-to-decide-between-buying-or-refinancing-in-2025\/","og_site_name":"Finhabits","article_publisher":"https:\/\/www.facebook.com\/Finhabits","article_published_time":"2025-10-30T18:09:15+00:00","og_image":[{"width":2368,"height":1792,"url":"https:\/\/www.finhabits.com\/wp-content\/uploads\/2025\/10\/Firefly_Flux_Conceptual-3D-illustration-of-a-modern-home-purchase-and-mortgage-planning-scene.-Abs-293074-1.jpg","type":"image\/jpeg"}],"author":"Walter Boza","twitter_card":"summary_large_image","twitter_misc":{"Written by":"Walter Boza","Est. reading time":"8 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"https:\/\/www.finhabits.com\/interest-rates-and-home-buying-how-to-decide-between-buying-or-refinancing-in-2025\/#article","isPartOf":{"@id":"https:\/\/www.finhabits.com\/interest-rates-and-home-buying-how-to-decide-between-buying-or-refinancing-in-2025\/"},"author":{"name":"Walter Boza","@id":"https:\/\/www.finhabits.com\/#\/schema\/person\/35b13af2fae4434607a0cd893ef72e3d"},"headline":"Interest rates and home buying: How to decide between buying or refinancing in 2025","datePublished":"2025-10-30T18:09:15+00:00","mainEntityOfPage":{"@id":"https:\/\/www.finhabits.com\/interest-rates-and-home-buying-how-to-decide-between-buying-or-refinancing-in-2025\/"},"wordCount":1593,"publisher":{"@id":"https:\/\/www.finhabits.com\/#organization"},"image":{"@id":"https:\/\/www.finhabits.com\/interest-rates-and-home-buying-how-to-decide-between-buying-or-refinancing-in-2025\/#primaryimage"},"thumbnailUrl":"https:\/\/www.finhabits.com\/wp-content\/uploads\/2025\/10\/Firefly_Flux_Conceptual-3D-illustration-of-a-modern-home-purchase-and-mortgage-planning-scene.-Abs-293074-1.jpg","keywords":["CRO-en"],"articleSection":["Learn"],"inLanguage":"en-US"},{"@type":"WebPage","@id":"https:\/\/www.finhabits.com\/interest-rates-and-home-buying-how-to-decide-between-buying-or-refinancing-in-2025\/","url":"https:\/\/www.finhabits.com\/interest-rates-and-home-buying-how-to-decide-between-buying-or-refinancing-in-2025\/","name":"Interest Rates and Home Buying: Should You Buy or Refinance?","isPartOf":{"@id":"https:\/\/www.finhabits.com\/#website"},"primaryImageOfPage":{"@id":"https:\/\/www.finhabits.com\/interest-rates-and-home-buying-how-to-decide-between-buying-or-refinancing-in-2025\/#primaryimage"},"image":{"@id":"https:\/\/www.finhabits.com\/interest-rates-and-home-buying-how-to-decide-between-buying-or-refinancing-in-2025\/#primaryimage"},"thumbnailUrl":"https:\/\/www.finhabits.com\/wp-content\/uploads\/2025\/10\/Firefly_Flux_Conceptual-3D-illustration-of-a-modern-home-purchase-and-mortgage-planning-scene.-Abs-293074-1.jpg","datePublished":"2025-10-30T18:09:15+00:00","description":"Interest rates are finally trending lower, Compare how changing mortgage rates affect your payments and decide the best plan for your home.","breadcrumb":{"@id":"https:\/\/www.finhabits.com\/interest-rates-and-home-buying-how-to-decide-between-buying-or-refinancing-in-2025\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/www.finhabits.com\/interest-rates-and-home-buying-how-to-decide-between-buying-or-refinancing-in-2025\/"]}]},{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.finhabits.com\/interest-rates-and-home-buying-how-to-decide-between-buying-or-refinancing-in-2025\/#primaryimage","url":"https:\/\/www.finhabits.com\/wp-content\/uploads\/2025\/10\/Firefly_Flux_Conceptual-3D-illustration-of-a-modern-home-purchase-and-mortgage-planning-scene.-Abs-293074-1.jpg","contentUrl":"https:\/\/www.finhabits.com\/wp-content\/uploads\/2025\/10\/Firefly_Flux_Conceptual-3D-illustration-of-a-modern-home-purchase-and-mortgage-planning-scene.-Abs-293074-1.jpg","width":2368,"height":1792,"caption":"Interest Rates and Home Buying: How to Decide Between Buying or Refinancing in 2025"},{"@type":"BreadcrumbList","@id":"https:\/\/www.finhabits.com\/interest-rates-and-home-buying-how-to-decide-between-buying-or-refinancing-in-2025\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/www.finhabits.com\/"},{"@type":"ListItem","position":2,"name":"Interest rates and home buying: How to decide between buying or refinancing in 2025"}]},{"@type":"WebSite","@id":"https:\/\/www.finhabits.com\/#website","url":"https:\/\/www.finhabits.com\/","name":"Finhabits: C\u00f3mo invertir en la bolsa de valores - 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