In today’s real estate market, mortgage interest rates are near record lows. If you’ve been in your current home for several years and haven’t refinanced lately, there’s a good chance you have a mortgage with an interest rate higher than today’s average.

Here are some options you should consider if you want to take advantage of current low rates before they rise.

Sell and Move Up (or Downsize)

Many of today’s homeowners are rethinking what they need in a home and redefining what their dream home means. For some, continued remote work is causing them to need additional space.

For others, moving to a lower-cost-of-living area or downsizing may be great options. If you’re considering either of these, there may not be a better time to move. Here’s why.

The chart shows average mortgage rates by decade compared to where they are today.

Today’s rates are below 3%, but experts forecast rates to rise over the next few years.

If your mortgage’s interest rate is higher than today’s average, take advantage of this opportunity by making a move and securing a lower rate. Lower rates mean you may be able to get more house for your money and still have a lower monthly mortgage payment than you might expect.

Waiting, however, might mean you miss out on this historic opportunity. Below is a chart showing how your monthly payment will change if you buy a home as mortgage rates increase.

[View our chart here.]

Breaking It All Down

Using the chart above, let’s look at the breakdown of a $300,000 mortgage:

When mortgage rates rise, so does the monthly payment you can secure.
Even the smallest rate increase can affect your monthly mortgage payment.
As interest rates rise, you’ll need to look at a lower-priced home to keep the same target monthly payment, meaning you may end up with less home for your money.

No matter what, whether you’re looking to move up or downsize to a home that better suits your needs, now is the time. Even a slight rise in interest rates can significantly impact your purchasing power.

Plan Smarter, Buy Smarter — Use Our Mortgage Calculator!

Refinance – lower your payments.

If making a move right now still doesn’t feel right, consider refinancing. With the current low mortgage rates, refinancing is an excellent option if you’re looking to lower your monthly payments and stay in your current home.

Here’s how refinancing could benefit you:

Lower Monthly Payments
Securing a lower interest rate can reduce your monthly mortgage payment, freeing up cash for other financial goals or expenses. Refinancing to a lower rate can significantly affect your monthly budget.
Shorten Your Loan Term
If you’re financially able, consider refinancing to a 15-year mortgage instead of a 30-year term. This will raise your monthly payment slightly, but you’ll save significantly on interest and pay off your home faster.
Switch to a Fixed-Rate Mortgage
If you currently have an adjustable-rate mortgage (ARM), refinancing to a fixed-rate mortgage can lock in a stable, predictable monthly payment. This can protect you from future rate hikes, offering peace of mind as rates increase.
Consolidate Debt
Refinancing can allow you to access your home’s equity to pay off high-interest debts, like credit cards or personal loans. Rolling these debts into a lower-interest mortgage can simplify payments and reduce your interest expenses.
Eliminate Private Mortgage Insurance (PMI)
Refinancing might allow you to remove PMI if you’ve built up at least 20% equity in your home. This can save you hundreds of dollars each month and improve your financial flexibility.
Cash-Out Refinancing for Home Improvements
Cash-out refinancing lets you tap into your home equity to fund renovations or repairs. With this approach, you may increase your home’s value while locking in a lower rate.
Build Equity Faster
By lowering your interest rate and adjusting your term, you can accelerate equity growth in your home. Faster equity growth can provide a financial cushion for future investments or help you reach a debt-free milestone sooner.
Plan for Rate Increases
Refinancing now can protect you against expected interest rate hikes, securing lower payments before rates rise again. This proactive step can make a big difference in the life of your loan.

If refinancing sounds like a good fit, consult a mortgage expert or use our mortgage calculator to estimate how much you could save. Refinancing can be a powerful tool for reducing financial strain and making the most of your current home.

Bottom Line: What Experts Are Saying

Please take advantage of low rates before they begin to rise. Whether you’re thinking about moving up, downsizing, or refinancing, let’s connect with local real estate experts at KM Realty Group LLC today and take the first step towards securing your financial future and achieving your homeownership dreams. We can also discuss which option is best for you.

Don’t wait until rates climb higher!