With the Fed’s latest rate cut, these mortgage lenders can fuel your refinance plans

If you took out a mortgage between 2022 and 2024, and your rate is higher than you would like — this could be your sign to refinance. 

On Dec. 10, the Federal Reserve announced a Federal Funds Rate cut for the third time in 2025, bringing the benchmark to 0.75 points below its start-of-year level. An annual decline this steep hasn’t happened since 2020. And while this rate cut may not directly lower mortgage rates — which typically move in conjunction with the 10-year Treasury yield instead — they have already dropped significantly this year. 

During the week ending Jan. 2, 2025, the average 30-year fixed rate was 6.91%, according to Freddie Mac’s weekly Private Mortgage Market Survey. As of Dec. 4, it sits at 6.19%. See how much rates have changed over the past five years:

You may be wondering, if rates are trending downward, why not wait for them to drop further before refinancing? 

Experts have weighed in on that theory and say rates are not expected to move much over the next year. In fact, Realtor.com predicts rates will average out to 6.30% in 2026. If rates do move down at certain times of the year, they are not likely to move much. 

“People who are waiting for rates to be a lot lower are going to be disappointed, because rates aren’t going to fall that much,” Jonathan Miller, president and CEO of Miller Samuel Real Estate Appraisers and Consultants, previously told CNBC Select. 

Additionally, experts say that if you can get a rate that is as little as 0.50% to 0.75% less than your current one, it’s worth refinancing. Let’s look at an example using CNBC Select’s mortgage calculator: With a $350,000 mortgage, you’ll save $115 monthly and $41,429 over the life of the loan in interest if you refinance from a 6.75% interest rate to a 6.25% interest rate.

Even with closing costs — which average around $5,000 — you’ll save tens of thousands over the life of your loan by refinancing to a 0.50% lower rate. You can calculate the difference in your own mortgage payment here: 

If you decide it’s time to refinance, choose a lender known for minimal closing costs and low rates — this will ensure that you get the best deal. 

Better is known for its lower-than-average rates. Plus, it gives refinancing borrowers the option to roll their closing costs into their loan, so they don’t have to pay cash up front.

If you choose to roll your closing costs into the loan, work with a financial adviser to ensure this option actually saves you money, as it may not be worth it in some situations. For example, if you have the cash upfront, you should just pay the closing costs then and save on the interest you would pay on over the life of the loan. 

If you choose to go with LoanDepot — which is our pick for best refinance lender for online closings — it will waive all lender’s fees on future refinances. So, if rates drop lower, you’ll be able to refinance without that extra expense. However, you may still have to pay other closing costs. 

Additionally, there are no in-person locations, so it’s not the spot for you if you want to deal with your lender in person.

We combed through dozens of refinance lenders to figure out the best ones — read about them here. 

At CNBC Select, our mission is to provide our readers with high-quality service journalism and comprehensive consumer advice so they can make informed decisions with their money. Every mortgage article is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of mortgage products. While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content without input from our commercial team or any outside third parties, and we pride ourselves on our journalistic standards and ethics.

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