Articles by Matt Richardson

Mortgage rates are the lowest they've been since 2022. Here's how to get one even lower now.

While it may still feel like mortgage interest rates in the 4% to 5% range are still a ways off, the reality is that rates are slowly but noticeably declining again.Case in point: Mortgage rates have been declining for much of 2025. After starting the year averaging over 7%, rates on Thursday again moved back to a three-year low of 6.13%. That opens new opportunities both for homebuyers previously stuck on the sidelines waiting for rates to become more affordable and homeowners looking to refinance their high rates.However, just because mortgage rates are the lowest they've been since 2022, it doesn't automatically make them worth pursuing. If buyers can find ways to get a rate even lower than that 6.13%, however, even in the high 5% range, it may be worth acting. Fortunately, there are ways in which buyers can do just that. Below, we'll break down three strategies to consider right now.Start by seeing how low your current mortgage rate offers are here.How to get a mortgage rate lower than today's average nowFor many buyers, a huge difference in mortgage rates isn't required. Just a slightly lower rate of 25 basis points can justify action and lead to affordability. Here's how to get a rate lower than that average 6.13% right now:Add mortgage pointsMortgage points function as a fee that buyers pay lenders to secure a rate lower than what's offered. Many lenders will list rates on their websites with these fees already accounted for, which is a large part of the reason why you see lower rates on their site than traditional averages. And while these fees may be less than ideal to pay, you'll typically have the option to roll them into your overall loan amount or pay them up front during the closing process. Either way, it can result in a mortgage rate 25 basis points to 50 basis points lower than what you'd otherwise receive. That means the 6.13% average is now 5.88% or 5.63%, justifying enough savings in your new mortgage payments to make it worth paying.Learn more about buying mortgage points online here.Consider an adjustable-rate mortgageYou may be able to get an interest rate under 6% without having to pay any additional costs. Sounds too good to be true? It doesn't have to be if you pursue an adjustable-rate mortgage (ARM) now, with many lenders offering rates in the high 5% range. The catch here is that this is adjustable, so after a certain period (frequently five, seven or 10 years) the rate will adjust based on market conditions. That can be risky for those homeowners who are unsure about what the climate would look like at that point, but it can be a cost-effective way to get started with a mortgage now. And it's important to remember that an ARM can be refinanced into a fixed-rate loan in the future, should you want to get ahead of any adverse rate changes in a few years.Make a large down paymentHave you been patiently waiting for the mortgage rate climate to change? Have you been saving a lot of money in the interim? If so, consider making a large down payment on your home of more than the traditional 20% lenders require without private mortgage insurance being tacked on. By doing so, not only will you have a smaller mortgage balance to pay down each month, but you'll reduce your loan-to-value (LTV) ratio and encourage lenders to offer a better rate than they would with buyers putting down 20% or less.The bottom lineWith the right strategy, savvy homebuyers can make today's lower mortgage interest rates even more affordable. By evaluating their mortgage point and ARM options and by making a large down payment, buyers can easily secure a rate under 6% now. But remember that mortgage rates change daily, so if you're close to where you want to be in terms of interest rates, it makes sense to be aggressive now. It's been a long time since mortgage rates were available in the 5% range, so you'll want to take advantage now that they're accessible again.

12 hours ago

Technology

3 smart ways to use a HELOC before 2026

A home equity line of credit (HELOC) offers homeowners a cost-effective way to finance a variety of projects or expenses. And, based on data released over the summer, there's plenty of money to utilize, with home equity levels recently hitting a cumulative record high in the country. With interest rates on HELOCs lower than what's available for borrowers with home equity loans, personal loans and credit cards, a HELOC is also one of the cheapest ways to borrow right now.But it's not a totally risk-free product, either. A HELOC does leverage your home's equity as needed and failure to make the agreed-upon repayments could lead to foreclosure. It also has a variable interest rate that's been steadily declining for borrowers in recent years, but because of its structure, it could make budgeting a bit more difficult compared to fixed-rate options. To better improve their chances of HELOC borrowing success, then, it may help homeowners to know the smart ways to use the line of credit, especially now in the final weeks of 2025. Below, we'll break down three smart ways to use a HELOC, specifically, before 2026.See how much home equity you'd be eligible to borrow with a HELOC here.3 smart ways to use a HELOC before 2026Considering borrowing with a HELOC now? Here are three effective ways to have it work for you in the final months of 2025:To consolidate high-rate credit card debtThe average credit card interest rate is around 21% right now. The average HELOC rate, however, is just 7.85%. That makes the latter almost three times more expensive than a HELOC. It makes sense, then, to use the HELOC to consolidate the high-rate credit card debt you're currently burdened with. By paying off the debt with the HELOC, you'll reduce the number of monthly payments you have to make to just one and it will be with an interest rate that's much more affordable, too, setting you on a more rapid path toward permanent debt relief. Just be sure to calculate your repayment costs at a variety of different interest rates (thanks to the HELOC's variable rate) to more accurately determine a realistic repayment plan.See how low your current HELOC rate offers are now.To make select home repairs and renovationsDid you know that you can deduct the interest paid on a HELOC if the line of credit is used for specific home repairs and renovations? Projects like kitchen renovations, bathroom remodels, new rooms and more can all qualify for the deduction. This not only saves you money in a way that other borrowing products cannot, but it also makes concerns over the changing HELOC rate less pressing when you know that you'll be able to deduct the interest paid on the HELOC when tax season arrives anyway. Just be sure to apply for the HELOC (and use it for these projects) now, in the final two months of 2025, or your tax deduction will be delayed until it comes time to file for 2026, instead.To build a backup emergency fundInflation has risen in the past two reports released by the Bureau of Labor Statistics. Unemployment is up, too. Against this backdrop, a HELOC coordinated to be used as a back-up emergency fund could make sense, especially if your home's value and available equity to leverage have increased in recent years, as it has for many. Remember, you don't need to make payments on the full HELOC line approved for, just for any amount borrowed. And full repayments won't be due until the initial draw period has concluded, as many lenders mandate interest-only payments on the HELOC to start. So this could be the smart way to boost your financial security in today's unpredictable economic climate. Just be smart in your approach, as your home equity is being leveraged here, and you don't want to borrow from it recklessly, potentially putting you in a worse financial position than where you started.The bottom lineA HELOC can be a smart and functional tool for homeowners during many periods, but especially so now, in the final months of 2025. Whether it's used to consolidate high-rate credit card debt, to make specific home improvement projects, as a back-up emergency fund or for all three purposes, a HELOC offers homeowners a cost-effective way to borrow now. Just be sure to time any application carefully, as some of the features of a HELOC may be better exploited in the final months of the year (like home projects) versus being delayed into 2026.

3 days ago

Technology

How low have HELOC interest rates dropped over the past year?

If you're looking to borrow money, the interest rate you need to repay it back with is always a top consideration. Unfortunately, in recent years, cost-effective borrowing options have been rare. With interest rates on products like home equity loans, personal loans and credit cards all recently in the double digits (not to mention mortgages, which at one point were near their highest level since 2000), borrowers had very few affordable options to choose from.Against this backdrop, a home equity line of credit (HELOC), however, has been one of the better ways to borrow. Not only does it leverage a robust source (with the average home equity amount comfortably over $300,000 according to a report released earlier this year), but it does so with an average rate significantly lower than all of the aforementioned alternatives. And that rate is consistently declining, too.Thanks to the variable-rate nature of the product, which sees rates change monthly based on market conditions, a HELOC isn't just one of the cheaper ways to borrow equity now, it's also one of the cheaper ways to borrow money, period.To better appreciate the affordability and timeliness of this unique product, then, it helps to understand the recent trajectory HELOC rates have experienced. And it's a positive one for both existing borrowers and prospective ones. So, how low have HELOC interest rates actually dropped over the past year? That's what we'll examine below.Start by seeing how low your current HELOC rate offers are here.How low have HELOC interest rates dropped over the past year?While interest rates have cooled over the past year, thanks in large part to the Federal Reserve's interest rate reductions, the impact has been arguably felt most powerfully in the HELOC borrowing space. This is great news for existing borrowers, who see their rate adjust monthly based on market conditions without having to refinance as they would with alternative products. But the recent rate declines could also encourage potential borrowers to act, knowing that the product here is well-positioned to become more affordable over time. So, how low have HELOC interest rates dropped over the past year? Here are the average rates on a $30,000 HELOC, according to Bankrate, over the past 13 months:September 2024: 9.99%October 2024: 8.94%November 2024: 8.70%December 2024: 8.55%January 2025: 8.27%February 2025: 8.28%March 2025: 8.06%:April 2025: 7.90%May 2025: 7.99%June 2025: 8.27%July 2025: 8.27%August 2025: 8.13%September 2025: 8.90%October 2025: 7.89%In short: HELOC rates, minus a few temporary increases, have been on a long, steady decline for much of the past year. And, as of late October 2025, HELOC rates are more than two full percentage points lower than they were at the start of September 2024. If you're a homeowner with a significant amount of equity to utilize and a good-to-excellent credit score, though, you may be able to find a rate even lower than that 7.89% now. Take the time, then, to shop around, comparing rates and lenders (and remember that you don't have to use the same bank you have your mortgage with if you don't want to).Shop for low-rate HELOCs online here.The bottom lineToday's low HELOC interest rates aren't an anomaly. Instead, they're a reflection of an increasingly cooling interest rate climate that homeowners in need of extra financing would be smart to take advantage of. Just be sure to calculate your repayment costs against a variety of rates, both higher and lower than what's currently available, to more accurately ensure long-term affordability. With your home as collateral in these exchanges, it's critical to get the math right before formally submitting an application.

3 days ago

Technology

Will mortgage interest rates drop after this week's Fed meeting?

All eyes will turn toward the Federal Reserve this week as the central bank holds its penultimate meeting of 2025 to determine monetary policy and the future of interest rates.The bank issued a rate cut in its last meeting in September, its first of the year. That followed a pause for most of 2025 after the central bank cut rates three times in the final months of 2024. As of Monday morning, there was around a 97% chance the Fed would cut rates again in this week's meeting, according to the CME Group's FedWatch tool. While the expectation is that the federal funds rate will be reduced by 25 basis points, any relief here will help borrowers, even indirectly.And that's especially true for homebuyers, some of whom have been contending with the highest mortgage rates on record in decades over the past few years. And while the Fed doesn't directly dictate what rates lenders offer borrowers, it does go a long way toward impacting them. But will mortgage interest rates actually drop after this week's Fed meeting? Or should borrowers expect them to hold steady a bit longer? Those are the questions we'll examine below.Start by seeing how low your current mortgage interest rate offers are here.Will mortgage interest rates drop after this week's Fed meeting?The answer to this simple question is a bit more nuanced than it may seem on paper, and the timing may not align neatly enough to occur at the conclusion of the meeting on October 29. All one has to do is look at recent mortgage interest rate history to see that mortgage rates drop around the time of a Fed rate cut, but not always right after, and not necessarily by the same amount the Fed reduced rates by.For example, mortgage interest rates fell to a two-year low in September 2024, a few hours before the Fed actually issued a larger-than-anticipated 50 basis point reduction at the time. And that same dynamic played out almost exactly one year later. When the central bank cut rates by 25 basis points last month, mortgage interest rates had already declined that morning to their lowest level in three years.So, yes, mortgage interest rates could drop in connection with this week's Fed meeting, but that could occur preemptively, before the cut is issued. That's largely because lenders don't need the Fed to formally act to get ahead of that decision by reducing their offers. Many have already "priced in" this reduction, and that's why some borrowers may not see much of a material difference between the rates they see listed on online marketplaces today … and what they see on those same websites in the days following a cut. Keep an eye out, then, for timely (and fleeting) opportunities to lock in a low mortgage interest rate this week. And remember that after the two aforementioned rate drops, there were increases in the rate climate both times. So, if you find a low, affordable rate available this week, even if not quite as ideal as you'd have hoped for, consider locking it in anyway. You never know when these opportunities will present themselves again, and you can always refinance if and when they do.Compare mortgage rates and lenders online to learn more.What's been happening with mortgage interest rates lately?Overall, rates have been on a slow but noticeable decline for all of 2025. Mortgage rates were averaging just 6.13% in mid-September alongside the Fed's rate-cutting action at the time. They then rose later in the month as data items that would normally influence the rate trajectory were either delayed or paused amid the ongoing government shutdown. But in recent weeks, the average rate on a 30-year mortgage term has again declined. That was 6.34% on October 2, 6.30% on October 9, 6.27% on October 16 and 6.19% on October 23, according to FreddieMac. So rates here are heading in the right, downward direction for borrowers. And they could fall again, not only this week but in the final weeks of the year, too, as projections surrounding another Fed rate cut when the bank meets for the last time in 2025 in December are also elevated.The bottom lineMortgage interest rates can potentially drop after this week's Fed meeting, or they could fall right before it, depending on the lender in question and their response to Fed rate activity. Some other lenders, however, may have already taken the step to adjust their offers to reflect a rate cut this week. Be ready to shop around for lenders and rates, however, as offers could be significantly different from lender to lender. And be prepared to lock in a below-average rate if found. As recent history illustrates, these opportunities may not last for very long.

3 days ago