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The Federal Reserve's recent indications suggest that rates will stay low throughout 2026. This gives investors who still have higher-rate debt more chances to save money. Mortgage rates are expected to stay around 6.25% until 2027, and other estimates say they could drop to 6.%–6.0% or lower by mid-2026. This means that the next year will be a good time to refinance, which can help cash flow and long-term portfolio performance.
The Mortgage Bankers Association also predicts that single-family home sales will reach $2.2 trillion in 2026. This will be a moment when more investors will look at leverage, reorganize their debts, and be ready for new purchases. This mix of lower rates and more activity makes 2026 a good year for brokers to look at their clients' refinancing strategy, especially for those who locked in larger coupons earlier in the cycle.
Why 2026 Matters for Brokers and Investor Refinance Strategies
Lower nominal mortgage rates impact the math behind refinancing. When long-term rates go down, refinance windows open for investors who want to:
- Reduce debt service and improve cash flow
- Pull equity for acquisitions or renovations
- Replace short-term or higher-cost loans with longer amortizations.
The possibility of mortgage rates going down in 2026 is supported by recent Fed policies, lower inflation, and slower economic growth. Most forecasts point to a better climate for investor refinancing, although predictions do differ. This makes time and preparedness key for brokers who work with active portfolios.
Timing Refinancing Decisions Strategically
When rate windows open, brokers who are ready early help their clients save money.
Prepayment Penalties
Many investment loans have step-down penalties that affect the economics of refinancing. Looking at these penalties and when they end helps you determine if clients would be better off refinancing right away or waiting out the loan.
Market Positioning
The time of the appraisal, the property's performance during different seasons, and your chosen lender's ability all affect final results. When conditions are prime, brokers who keep an eye on maturities, keep their clients' paperwork up to date, and watch market signals can act fast.
How to Frame the Refinance Conversation
When talking to investor clients, use these four diagnostic checks:
1. Interest gap math
Figure out if the new rate will save enough money after closing fees to make the refi worth it. A general rule of thumb is that when rates are about 0.75 to 1.00 percentage points lower, many investors get a positive NPV. However, the size of the loan, the length of the loan, and the desire to pay out all play a role in this.
2. Loan purpose
Find out if the client wishes to (a) cut the payment, (b) take out equity, or (c) adjust the amortization. Each goal leads to a new set of product options, such as a rate-and-term refinance, a cash-out refinance, or a portfolio restructuring.
3. Timing and maturities
Start talking about refinancing 6 to 12 months before the due date or projected market movement. The "open period" for agency or large loans frequently starts long before the loan is due. Getting involved early keeps your choices open.
4. Portfolio vs. single-asset impacts
If a client owns more than one property, compare refinancing on each property separately to a consolidated plan (portfolio loan) that may save money on administrative costs and provide them the option to cash out on numerous properties.
Tactical Refinance Options to Present
- Rate-and-term refinance: lock in a lower interest rate, shorten the loan period, or switch from interest-only payments to amortizing payments. Best when the difference in rates is big, and closing costs are low.
- Cash-out refinance: Get equity out for down payments or purchases. This works best when property values and DSCR can handle more debt.
- Portfolio refinance: combining several loans into one loan to make things easier to manage and provide borrowers with the option to move equity around between assets.
- Staged refinance: first, roll over a group of assets (those with the most paperwork or the closest maturities) and then add properties as the market becomes clearer.
A Simple Checklist to Prepare Clients Now
- Pull a maturity map for all client loans (next 24 months).
- Build a refi scenario model (no change, modest drop, and large drop) to show different outcomes.
- Validate tax and accounting impacts with the client’s CPA (cash-out refis have different tax/timing effects).
- Pre-qualify the client’s documents, including tax returns, rent rolls, P&L statements, and reserve statements.
- Identify lender channels that handle agency, non-agency, and portfolio structures.
Market Context Sources
- MBA forecast of rising originations for 2026 provides the macro demand backdrop.
- Freddie Mac's weekly survey shows 30-year fixed trends that drive refi economics.
- Market pricing and industry outlooks indicate late-2025 positioning for rate relief in 2026; factor this into lock vs. wait decisions.
- CRE outlooks emphasize selective, data-driven lending and the importance of timing in 2026.
Explore 2026 Refinancing Opportunities With RCN Capital
RCN Capital offers specialized refinancing products, portfolio solutions, and dedicated broker support to help you take advantage of the finest possibilities as soon as they become available. Visit the RCN Capital Broker Page to learn more about programs, tools, and resources that will help you get your clients ready for the 2026 refinancing cycle.