TL;DR
Mortgage refinance rates, recently around 6.5% according to a December 2025 CBS News MoneyWatch report, are widely expected by housing experts to drift modestly lower in 2026, not fall sharply, leaving borrowers to balance potential savings from waiting against the risk that economic conditions change.
Why This Matters
For millions of U.S. homeowners, mortgage refinancing is one of the biggest financial decisions they will make outside of retirement planning. A move of even half a percentage point in rates can change monthly payments by hundreds of dollars and free up cash for savings, healthcare, tuition or paying down other debt.
Where refinance rates land in 2026 will depend heavily on broader economic forces: inflation, job growth, and Federal Reserve policy. When inflation cools and the labor market softens, the Fed tends to cut short-term interest rates, which usually helps pull down mortgage costs. The reverse is also true if inflation heats back up.
The latest update from industry groups suggests refinancing already makes up more than half of mortgage activity, according to data cited from the Mortgage Bankers Association. That shift affects not just individual households but also the housing market, consumer spending and, in turn, overall economic growth. Understanding what experts expect for 2026 can help homeowners decide whether to act now or wait, in a global news environment where borrowing costs remain a top story.
Key Facts & Quotes
In a December 2025 analysis, CBS News MoneyWatch reported average mortgage refinance rates near 6.5%, down from peaks above 7% in late 2023, based on national survey data. Several lending executives told the outlet they expect a gradual decline from here, assuming inflation continues to cool.
“There are many factors that will affect mortgage rates going into 2026, but the first and most important is inflation,” said Jeremy Schachter, branch manager at Fairway Home Mortgage. “Once inflation starts to lower, we will see rates come down.”
Jeff DerGurahian, chief investment officer and head economist at loanDepot, pointed to easing tariffs, cooling home prices, falling rents and a softer labor market as forces that could put additional downward pressure on rates. Rising unemployment historically pushes the Federal Reserve toward rate cuts to support the economy.
Still, experts caution that rates can move both ways. Churchill Mortgage branch manager Kevin Watson told CBS that a clear pickup in inflation could force the Fed to raise rates again: “We would have to see that inflation is rising at a rate that is not sustainable for the economy, triggering the Federal Reserve to raise interest rates in order to slow both the economy and inflation.” Even so, DerGurahian said, “We’re unlikely to see a sharp rise. Rates are expected to remain near current annual lows or drift lower.”
Looking specifically at 2026, Schachter said he expects refi rates going into the year to be similar to or slightly below late-2025 levels, while Watson suggested that rates in the low-6% to high-5% range could become a “new norm” rather than a brief dip. Brian Shahwan of William Raveis Mortgage highlighted the 10-year U.S. Treasury yield as a key benchmark to watch, noting that mortgage rates often track its direction.
What It Means for You
For homeowners, the central question is whether to refinance now or wait in hopes of better terms in 2026. If your current rate is well above today’s offers, or you need to consolidate higher-interest debt, some experts say it may make sense to refinance sooner rather than trying to time the absolute bottom in rates.
If your existing rate is closer to current market levels, you may decide to watch key indicators such as inflation data, job reports, Federal Reserve meeting statements and the 10-year Treasury yield, which often signals where mortgage costs are headed. In all cases, it is important to weigh potential interest savings against closing costs, how long you plan to stay in the home, and your overall financial goals.
A trusted lender or housing counselor can help model different scenarios so you can better understand what it means for your monthly budget if rates edge down, stay flat or unexpectedly rise.
Sources
CBS News MoneyWatch, “Mortgage refinance rate forecast for 2026: what some experts expect,” Dec. 9, 2025.
Mortgage Bankers Association, weekly mortgage applications data, 2025.
Freddie Mac, Primary Mortgage Market Survey, 2023-2024.
U.S. Federal Reserve, public statements and meeting materials on inflation and interest rates, 2023-2024.
Question for readers: If you have a mortgage today, what factors matter most to you in deciding whether to refinance before 2026 or wait?
