Should You Refinance
Now or Wait?

I’ve talked to a number of clients over the last two months wondering if now is the time to refinance or if they should wait for more rate cuts.

My answer: refinance now. But you might’ve already missed the best window of 2026.

Let me explain. I’ll start with the more general and move to the more nerdy so you can quit reading if it gets too dense with economics later.

Of course, if you have a 2.5% interest rate already, this doesn’t apply to you now (unless you need to refinance for cash-out purposes). But keep reading anyway.

If you can save $200+ per month now,
why would you wait?

Here’s a simple example. Let’s say you bought in June 2024 (18+ months ago) and you have $300,000 left on your loan balance. Your current rate is 6.875% but if you refinanced today you could get to 5.99%. You’d save $199 a month.

Now let’s say the total cost for the refinance is $2,000 (split between title/closing and origination fees) — plus you’d need to restart your amortization schedule. Even with that cost added in, you’re still saving money after year one.

Don’t be afraid to “reset” to 30 years again. The average life of a mortgage is 5–7 years because you’ll move or refinance before the full term. Think 3, 5, 7, and 10-year timeframes — not 30. With $200 in monthly savings, you could apply that directly to your principal balance and pay off the loan on your original timeline or sooner. Restarting amortization doesn’t mean restarting your financial plan.

Waiting 12 months for lower rates
is playing the lottery.

What if rates go up? What if rates do nothing? Consider: if you waited 12 months and rates dropped a full half percent, you’d save an additional $118 per month. But it would take 18 more months to catch up to the savings you already would have had — 30 months total before breaking even. And by then you could be moving, or rates could be lower still.

I talk to some people who want to save at least $500 per month before they refinance. In this scenario, rates would need to go to 4.25% to hit $500 in monthly savings. I’m not convinced we’ll see that in the next decade. You could leave upwards of $20,000 on the table waiting to save “more.”

Refinancing multiple times is easy — and smart. Refinance now. Then refinance again later if rates drop further. Why let the bank keep your money?

Did we really miss
the best window of 2026?

This may not mean we missed the only window or a good window. Just the best. We need 10-Year Treasury Yields to go lower for mortgage rates to improve. Yields go lower when the economy deteriorates or when inflation is tamed — and inflation hasn’t been tamed.

Just because the Fed “cuts rates” doesn’t automatically mean mortgage rates will go lower. The Fed’s rate decision affects only the short-term overnight rate charged between banks — it isn’t directly linked to mortgage rates. Go look at the last few Fed cuts and watch what happened to mortgage rates.

Furthermore, the Fed’s own dot plot shows they don’t plan on cutting much more. Mix in Kevin Warsh as the new Fed Chair — a known fiscal hawk — and the economic outlook for substantially lower rates in 2026–2027 becomes less optimistic. Maybe slightly lower. But not enough to justify waiting.

There is a chance help could come from stronger MBS performance (which would narrow the spread between the 10-year and the 30-year mortgage rate). But this mostly insulates mortgage rates from getting worse — it doesn’t push them meaningfully lower.

Summing it up.

At bottom, your mortgage is a monthly cash-flow decision. If lowering your payment today improves your flexibility, reduces stress, or frees capital, waiting for a perfect market is a losing bet.

Cash in now and later, if the market gets better — let’s both hope this is the case.

Adapted from Jordan Steffaniak’s Substack newsletter and YouTube video. Subscribe on Substack →