Your client calls with you with an important question: "Should I refinance now or wait?" As 2025 comes to a close, 30-year fixed mortgage rates are hovering at 6.15%. Predictions are that they will stay that way until ~2027. That means brokers have to walk a fine line, giving confident advice in a market that values accuracy over guesswork.
The truth is that figuring out when to refinance is all about looking at the effects. Mortgage rates are less volatile now, and the average rate is around 6%. This gives borrowers with higher-rate loans a real chance to get a better deal. If you think about these changes in a smart way, they can make client portfolios stronger, allowing them to bring in more revenue.
Getting a new loan today takes more than just looking for lower rates. The top brokers look at break-even timescales, fees, and long-term borrowing capacity to build personalized plans for each investor. This guide shows brokers how to confidently support clients by going through the stages, models, and conversations they will need to have with them.
Fannie Mae, the MBA, and Wells Fargo all see different paths for rates from 2025 to 2027, with averages ranging from 6% to 6.7%. This difference shows how hard it is to time the market exactly. Even advanced institutional forecasters recognize considerable uncertainty in their predictions.
Jerome Powell, the head of the Federal Reserve, even said, "Forecasting is very hard." This acknowledgment from the country's top monetary policymaker strengthens a key point: even specialists with a lot of economic data can't always get the timing right.
The best time to refinance a real estate loan is not always when rates are at their lowest. More often than not, the best time to do something takes into account several criteria, such as present carrying costs, client goals, and a realistic view of how rates may change in the future.
Conventional refinancing advice says to wait for interest rates to drop by 1% to 2% before thinking about refinancing. This very simple rule doesn't work anymore because there are so many different types of loans and costs associated with them.
Timing a refinance strategy requires a sophisticated break-even analysis accounting for:
With a $400,000 loan, a 0.5% rate cut, and $2,000 in closing expenses, you will break even in 18 months and save more than $100 a month. It takes almost six years to make up for the costs of the same rate cut on a $100,000 loan, and you only save around $30 a month. The amount of the loan has a big effect on whether or not refinancing is viable, no matter what the rate spreads are.
For many investors, the expenses of carrying current assets are more important than guessing what future rates will be. Clients who took out loans during the peak years of 2022 and 2023 and are already paying 8% to 10% interest may be having trouble cash flow, which is a good reason to refinance even if the rates don't drop a lot.
The first step in giving investors refinancing advice is to figure out how much money they will save each month and how much interest they will pay each year compared to the costs of refinancing. Clients who can save $300 or more a month and pay down their expenditures in 24 to 36 months should go ahead, even if rates decline in the future.
Investors who are short on cash flow will benefit right away from lower payments. If you wait for rates to go down, you'll keep paying thousands of dollars in interest each month. The expense of waiting is often greater than the benefit of somewhat better rates in the future.
The amount of time you own an investment property is a big factor in whether you decide to refinance. Clients who expect to sell in the next two to three years don't usually benefit from refinancing because the break-even time is usually three to five years.
Long-term hold strategies are better for aggressive refinancing. Investors who own a property for more than five years can justify refinancing for lower rates because longer periods of time mean bigger total interest savings.
Brokers can help clients refinance by linking their individual loan choices to their larger portfolio goals. Clients who are taking equity out of their investments to buy more properties have to think about timing in a different way than those who are optimizing their current holdings.
Investors who are eager to grow may take cash out refinances, even if it costs more, to obtain capital for new opportunities. Conservative investors may focus on lowering carrying costs across their existing portfolios by systematically refinancing loans they previously obtained with higher interest rates.
Refinances are not one-off transactions—use them to deepen engagement:
Put this packet together before submitting a refinance to a wholesale partner:
Clean, concise files reduce conditional underwriting and accelerate closings.
Refinancing is more than just a way to get a lower interest rate; it's a way for brokers to protect their clients' portfolios and get more business. The most important thing is to be diligent in your analysis: figure out when they'll break even, stress-test for future performance, and make sure portfolio decisions are in line with their long-term investing goals.
RCN Capital gives brokers the power to make quick decisions in today's market with flexible refinance programs like bridge-to-permanent and DSCR solutions. These are backed by a simple submission platform that protects the connections between brokers and their clients. Visit the RCN Capital Broker Page to learn more about refinancing options, get expert market advice, and turn rate timing opportunities into long-term customer value.