Mortgage Rates Just Took Their Biggest Drop in a Year: Here’s What That Means for You

Last Friday brought some good news in the housing world: mortgage rates saw their biggest one-day drop in over a year.

What Happened?

The September 6th jobs report came in weaker than expected- only 22,000 jobs were added versus the 75,000 forecast, and unemployment ticked up to 4.3%. That data pushed Treasury yields down, which in turn pulled mortgage rates lower. The average 30-year fixed rate fell to 6.29%, the lowest we’ve seen since October 2024.

For Buyers

This dip can directly impact your monthly payment. For example, on a $500,000 home with 20% down:

• At 6.99%, the principal and interest payment would be about $2,660/month.

• At the new rate of 6.29%, that drops to around $2,480/month.

That’s nearly $180 in monthly savings-which adds up to over $2,000 a year.

It’s also worth noting: rates can adjust multiple times in a single day. If you’re shopping lenders, remember that a lower rate quote doesn’t always mean one lender has a better loan product. It may just be a matter of when you spoke to them. That’s why it’s best to choose a lender you trust-someone whose communication style and approach fits you-and then ask if they can match the best rate you’ve seen.

For Homeowners Thinking About Refinancing

Refinancing isn’t free-it usually comes with closing costs in the 2–3% range of your loan amount. So the real question is: will the monthly savings outweigh the upfront cost?

A good rule of thumb: refinancing only makes sense if you can lower your rate by at least 0.5% to 1% and you plan to stay in your home long enough to “break even” on the fees.

For example, let’s say refinancing saves you $250/month but costs $5,000 in fees. You’d need to stay in your home at least 20 months before the savings start to add up in your favor. After that, it’s pure money back in your pocket.

If your current rate is above 6.875%, it’s worth running the numbers right now. And for those of you who’ve already set a “strike rate” with us, we’re keeping a close eye on things and will reach out if it’s time to pull the trigger.

The Takeaway

Mortgage rates don’t stay still for long, and opportunities like this don’t always last. If you’ve been waiting to buy-or waiting for the right moment to refinance-this could be it. The key is making sure the math makes sense for your situation.

XO,

Jen

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