📉 Mortgage Rates Just Dropped — Is Now the Time to Refinance or Re-Enter the Market?

If you’ve been keeping an eye on mortgage rates, you’ve probably seen the headline: 30-year fixed rates just dropped to 6.13% — the lowest they’ve been in 3 years.

That shift has a lot of homeowners and buyers wondering: is now the time to refinance or re-enter the market?

Let’s break it down 👇

When It’s Smart to Refinance

Generally, it makes sense to refinance when rates drop at least 0.5% to 1% lower than your current loan rate. That difference even a single percentage point can save hundreds per month and tens of thousands over the life of your loan but it doesn't make a ton of sense if the numbers don't pencil out.

Example: If you have a $600,000 loan at 7.25% and refinance down to 6.13%, your monthly payment could drop by $400–$500/month (depending on your term and taxes). 👈 That tracks!

That’s real money back in your pocket — and a big deal for affordability, especially in markets like Seattle and the Eastside where every fraction of a point matters.

⚠️ Many Homeowners Are Still Sitting at Higher Rates

Over the last two years, a lot of homeowners jumped on “rate buy down” opportunities but those temporary adjustments or short-term buy-downs have now expired. That means their current rate may be much higher than what’s available today.

If that’s you, this drop could be your chance to refinance into a fixed rate you actually want to keep — not just a temporary one.

💡 Pro Tip: Ask for a Free Refinance Option — and Get It in Writing

Many lenders were offering “free refinance” programs for anyone purchasing or refinancing in last years market, some still will. That means if you buy a home now (or refinance) and rates continue to drop later, you can refinance again without paying closing costs a second time. If you didn't set this up for the future, don't sleep on it again! I tell all of my clients to try and think about the future markets, not just the "current" one.

Here’s my advice:

• Ask your lender to honor a free refinance within 12–24 months.
• Get it in writing before you close. Some lenders will even guarantee it as part of your loan agreement.

If you don’t have a trusted lender offering this already, connect with me — I have partners who are currently honoring zero-cost refinancing programs for my clients.

How Refinance Costs Actually Work

A common misconception is that refinancing costs thousands of dollars upfront — and while that can be true, it’s not the whole story.

In most cases, refinance costs (like lender fees, title work, and appraisal) are rolled into your new loan balance, meaning you won’t pay anything out-of-pocket at closing. That makes refinancing feel like a “no-cost” option — and for many homeowners, it is. You simply start fresh with a new loan at a lower rate, and the savings build month over month.

But here’s the other side 👇

Even though you don’t pay the fees upfront, those costs still exist — they’re just financed into your new mortgage. That means you’ll pay them off over time, and it can slightly extend your payoff timeline or increase your principal balance.

So, refinancing doesn’t always make sense if:

• You plan to sell your home in the next 1–3 years.
• You’ve already paid down a large portion of your loan and would be restarting the amortization schedule.
• The rate drop isn’t big enough to offset the cost of refinancing over time.

The rule of thumb? If you can break even within 12–24 months (meaning your monthly savings exceed the total refinance costs within that window), it’s usually worth it. Otherwise, it might make sense to wait — or explore a rate renegotiation with your lender instead.

What This Means for Buyers Who’ve Been Waiting

When rates fall, buying power goes up. Many buyers who were waiting on the sidelines because of affordability are jumping back in AND for good reason. Lower monthly payments mean more options, better neighborhoods, and stronger offers. If you’ve been waiting for the “right time,” this could be your window.

✨ Final Thought

Whether you’re thinking about refinancing your current home or buying your next, it’s worth running the numbers right now and getting prepared to pull a trigger. With rates at 6.13% and programs that let you refinance for free later, you can position yourself smartly for the next market cycle.

Let’s chat — I’d love to help make heads or tail of what I am seeing in the market and help you decide your next move 😉

RaeAnne Marcum REAL BROKER | Team Lead at MDG📍 Seattle | Bellevue | Tri-Cities 📱 509.521.5323 🌐 www.raeannemarcum.com 📧 raeanne@mdgresidential.com Instagram @realestatebyraeanne