Refinancing is back in the news now that interest rates have stabilized after years of volatility, but this time with a more methodical approach. Instead of waiting for big declines in interest rates, investors are looking at refinance options as a way to improve cash flow, free up equity, and reset debt structures for the long term.
This change gives brokers an opportunity to help people who know how to properly utilize refinance options in today's stabilizing market environment.
The spread of mortgage rates has gotten smaller and more stable. Freddie Mac's data predicts that 30-year fixed rates will only drop slightly below the low-6% area by the end of the 2026. This doesn't mean prices are going back to what they were before 2022, but it does mean that things are stable again, which opens up refinance windows.
Market Volume Projections: In 2026, the refinance market is expected to hit $24.49 billion, up from $22.82 billion in 2025. By 2034, it is expected to be worth $46.17 billion, with a compound annual growth rate of 8.2%.
Investors are refinancing to:
In a market with stable interest rates, refinancing is more about certainty than speculation. Investors don't wait for small rate decreases. Instead, they act when the math for refinancing shows that they can make payments that are affordable and sensible.
In traditional break-even analysis, you divide the closing costs by the monthly savings. But a full appraisal needs a closer look:
Standard Break-Even Formula: Closing Costs ÷ Monthly Payment Savings = Break-Even Months
Example Scenario:
Enhanced Break-Even Considerations:
When break-even durations are less than 30 months, investors who expect to keep their properties for 36 months or more usually think it's a good idea to refinance. Shorter holding periods need break-even timings that are faster in proportion.
For brokers, evaluation starts with structure. The most successful refinance conversations follow a clear analytical framework.
The practical rule of thumb is that the rate should drop by 0.75% to 1.00% to make refinancing worthwhile when closing fees are taken into account. However, the size of the loan and the length of the amortization period are still factors to consider.
For instance, if you refinance a $1 million investment loan and lower the interest rate by 0.75%, your monthly cash flow might improve significantly, even if you don't break even for 24 to 30 months. Brokers that make these comparisons explicit and present measurable gain to their clients trust and credibility.
Not all refinances are created equal. Each objective points to a different structure:
Clear intent prevents misalignment during underwriting and accelerates approvals.
Equity is what really drives people to refinance. According to ATTOM data, about 45% of mortgaged U.S. homes had significant equity in 2025, which means that the loan debt was 50% or less of the property's worth.
Most refinance programs in 2026 require:
Lenders are placing more value on certainty of execution than on speculative appreciation, so it's important to have realistic valuations.
A lot of investment loans have penalties for paying off the loan early. Knowing when those penalties end might help you decide if refinancing now or waiting will provide your client with better overall outcomes.
Strategic brokers start talking about refinancing years before the loans are due. They keep the paperwork up to date and the choices open to best assist clients in reaching their goals.
In 2026, cash-out refinances are growing faster than other options like HELOCs and second-position loans because of their structural advantages. A cash-out refinance changes debt into predictable, long-term funding, unlike variable-rate credit alternatives.
For investors, this means:
Despite rising demand, underwriting has not loosened. Most programs continue to emphasize:
Lenders prefer brokers who have documentation prepared, keep their files clean, and set clear expectations for borrowers early on.
When you refinance, it resets the amortization schedule, which changes the ratio of interest to principal in monthly payments. Early-term loans have higher interest rates, but you can fully deduct them for investment properties.
Tax Planning Coordination: Work with your clients' CPAs to understand:
Investors who plan to sell property in the future through 1031 exchanges need to think about how refinancing may affect finding a replacement property and paying off their debts.
Online refinancing expanded at a rate of 12.4% last year, with many borrowers becoming more comfortable with it. Some benefits of the platform are:
The best brokers act as analytical partners instead of just being another source of financing. This often includes:
RCN Capital's refinance programs are flexible and disciplined, and made for real estate investors who are understand the condition today's market. Our diverse loan offerings feature:
This approach helps brokers give their investor clients consistency, confidence, and long-term value. Visit RCN Capital's broker page to learn how partnering with RCN Capital will help grow your pipeline in 2026.