2025 Interest Rate Trends: How Brokers Can Win with Private Lending

As a mortgage broker or lending partner, 2025 is looking like the kind of year where interest rate movements are going to make or break deals. With the Federal Reserve's cautious approach to rate cuts, inflationary forces, and changing economic policies, private lending is no longer just an alternative; it's a necessity for getting deals done in today's volatile environment.

RCN Capital has analyzed the data and listened to partners just like you. This is what we are witnessing:

• According to 72% of brokers, more than half of their income currently comes from private financing.
• As of April 2025, the average 30-year fixed mortgage rate is 6.65%, and analysts anticipate only slight decreases later this year.
• Due to investors' desire for speed and flexibility, the demand for hard money loans has increased by 18% year over year.

We'll explain how interest rate changes are affecting private lending in this blog, what that implies for your company, and some practical ways to prosper in 2025. Let's get started!

The 2025 Interest Rate Landscape: What Brokers Need to Know

As of April 2025, the housing market in the U.S. is going through a phase of relatively stable mortgage rates. The 30-year fixed rate for mortgages is down slightly, averaging 6.6%, compared to recent months where it was slightly higher. Part of the drop is due to economic uncertainties that include continued tensions over trade as well as ongoing tariff implementations from the Trump administration.

1. The Fed’s “Higher for Longer” Strategy

The Federal Reserve has maintained rates at 4.25%-4.5% since March 2025, with just two planned cuts by year-end. Though this is a reversal from the aggressive cuts in 2024, it represents cautious optimism against persistent inflation and geopolitical risks such as possible tariffs.

Why it matters for brokers:

• Traditional lenders are tightening guidelines: Banks turned down 40% of commercial loan applications in Q1 2025 due to more stringent criteria.
• Private lending fills the gap: Investors are switching to alternative financing for quicker approvals and customized solutions.

2. Mortgage Rates: Stuck in the Mid-6% Range

Despite Fed cuts, 30-year fixed mortgage rates remain elevated:

This “higher for longer” environment means borrowers need creative solutions—fast.

3. The Rise of Hard Money Lending

With traditional financing lagging, hard money loans are surging. Here are just some of the benefits:

• Speed: Loans close in 10-14 days compared to bank average of 45+ days.
• Flexibility: Finance fix-and-flips, new construction, and non-QM projects.
• Fixed-rate stability: Protect clients from rate volatility with terms that do not change.

How Interest Rate Trends Impact Private Lending

For private lenders and brokers, these interest rate fluctuations provide challenges as well as opportunities:

1. Higher Borrowing Costs = More Creative Solutions

Rising rates compress investor margins, but brokers who offer niche loan products win:

• Fix & Flip Loans: Volume up 23% as investors bid on distressed property.
• Bridge Financing: Perfect for clients who need rapid capital to close time-sensitive transactions.
• Multi-Family Loans: With vacancy rates leveling off, investors pursue cash-flowing properties.

Pro Tip: Employ RCN Capital's BLN Software to configure loans with real-time rate updates and transparent terms.

2. Refinancing Opportunities Boom

Lower forecast rates in late 2025 could trigger a wave of refinancing. For instance:

• A rate reduction of 1% on a 1M loan saves investors $600/month.
• Actionable Strategy: Start conversations now with clients about future refinancing options.

3. Market Volatility & Regulatory Changes

The current economic environment, driven by global trade policies and geopolitical tensions, indicates probable fluctuations in interest rates. Brokers need to plan for probable fluctuations that could affect their lending strategy.

Expected reforms, like the modification of lending buffers, might change the pattern of lending, influencing how risk and borrower eligibility are determined by brokers.​

4. Commercial Real Estate’s Mixed Outlook

While office spaces struggle (delinquency levels reach 9.37% in 2024), other asset classes prosper:

• Industrial Properties: E-commerce drives up demand; rents are up 8% YoY.
• Multifamily Housing: Stabilizing interest rates could increase occupancy by 5% by Q4.
• Retail: Vacancy rates at prime locations are expected to fall to 4.2%.

Broker Opportunity: Establish yourself as an expert in fast-growing categories such as logistics or built-to-rent neighborhoods.

3 Strategies to Win in 2025’s Rate Environment

1. Educate Clients on Rate Lock Options

With volatility likely, offer rate locks to provide stability:

• Example: “Lock in today’s 6.5% rate for 45 days while we secure your loan.”
• Stat: 68% of borrowers choose brokers who explain rate trends clearly.

2. Leverage Technology for Speed & Transparency

Tools like RCN Capital’s broker portal let you:

• Share real-time updates with clients.
• Automate document collection.
• Close deals 40% faster than competitors.

3. Build a Niche Network

Partner with professionals who drive referrals:

• Real Estate Agents: Host a “Market Trends” webinar to showcase your expertise.
• Contractors: Offer rehab budget templates for fix-and-flip clients.
• Financial Advising: Create content on tax-efficient investing strategies.

 2025 is set to be a dynamic year in the world of real estate. While interest rate movements work in favor of nimble lenders, agents who adopt private lending will take center stage. Here are the top takeaways:

1. Educate relentlessly: Clients prefer brokers who can provide transparency about the effects of rate changes.
2. Specialize: Target high-need niches such as industrial properties or multi-family.
3. Partner smartly: Choose lenders that deliver speed and technology-driven transparency.

Why RCN Capital is Your 2025 Private Lending Partner

When rates change, brokers require a lender that offers speed, adaptability, and dependability. Here's how we assist:

• Fast Closings: 10-14 days, even for complex deals.
• Diverse Loan Programs: From fix & flip to ground-up construction and everything in between.
• Broker-First Support: Earn competitive broker commissions through our Referral Program.
• Market Insights: Get exclusive webinars and rate trend reports to remain ahead. 

Ready to take your brokerage to the next level? Connect with us today to discuss our real estate financing solutions and how we can help you grow your business