Thinking about refinancing but not sure if now’s the right time? With mortgage rates still hovering above recent lows, many homeowners are asking the same question: refinance now or hold out for better terms in 2026? Whether you're trying to cut your monthly payments, tap into home equity, or just lock in stability, timing matters—and here’s how to weigh your options.

Refinancing your mortgage can be a smart financial move—but only if it aligns with your long-term goals and the current rate environment. While many are hoping for lower rates in the next year or two, refinancing today may still offer savings depending on your situation.

Understanding Mortgage Refinancing

Refinancing replaces your current home loan with a new one—usually to lower your interest rate, reduce your monthly payment, switch loan types, or cash out some equity. But it’s not free: you’ll need to factor in closing costs, fees, and the breakeven point (how long it takes to recover those upfront expenses).

Should You Refinance Now or Wait?

Here's what to consider:

• Current vs. Future Rates: Rates are higher than they were in 2021–2022, but not sky-high. If the Fed eases rates in 2026 as inflation settles, holding off could lead to better deals—but there’s no guarantee. Rates could also stay elevated longer than expected.

• Your Existing Loan Rate: If your current mortgage is above 7%, refinancing now might bring immediate relief—even if rates drop slightly in the future.

• How Long You’ll Stay in Your Home: If you plan to move in the next few years, waiting may not be worth it. Refinancing only makes sense if you’ll stick around long enough to benefit from the lower payment.

Other Refinancing Considerations

• Loan Term Changes: Refinancing into a 15-year loan may raise your payment but help you pay off your home faster and save on interest.

• Cash-Out Refinance: Need funds for renovations or to pay off debt? Tapping into home equity now may make more sense than waiting for uncertain rate shifts.

• Credit Score and Home Value: Lenders reward stronger credit and higher home equity with better rates—so your financial profile matters just as much as the market does.

The Bottom Line

There’s no one-size-fits-all answer to refinancing. If the numbers work in your favor and you plan to stay in your home, refinancing in 2025 could still be a smart move. But if you’re not in a rush and want to hold out for potentially lower rates in 2026, staying the course might make sense too. Talk to a trusted lender, run the numbers, and make the choice that aligns with your goals—not the headlines.