Is Now a Good Time to Refinance? What 2027 Forecasts Say

8 min read · LenderMatch Learn

With the 30-year fixed rate at 7.24% (Freddie Mac, week of October 29, 2026) and the October 2026 forecasts from Fannie Mae and the Mortgage Bankers Association keeping it above 7% through 2027, a rate-and-term refinance mostly makes sense if your current rate is about 8% or higher. Removing mortgage insurance or shortening your term can also justify one; taking cash out is a separate question, answered by your blended rate.

Below: the 2027 forecasts side by side, a break-even example on a $320,000 loan, and the cash-out math. The rate you are quoted matters as much as the market average, so it pays to compare more than one lender before you decide.

Updated October 30, 2026. We update it after every Fed meeting (next: December 8 and 9, 2026) and each monthly Fannie Mae forecast, and refresh the Freddie Mac rate weekly.

Is now a good time to refinance your home?

A refinance replaces your mortgage with a new one, and the new loan comes with closing costs. Freddie Mac says you can expect to spend 3% to 6% of the loan principal. A lower rate has to save enough each month to earn that back before you sell or refinance again.

That is why the answer in late 2026 depends almost entirely on the rate you have now:

• About 8% or higher: a refinance near today’s rates can pay back its costs in roughly three to four years (see the example below).
• Between about 7.25% and 8%: possible, but the payback stretches to four to five years or more. Worth pricing if you plan to stay a long time.
• Below about 7.25%: a rate-and-term refinance near today’s rates would save little or raise your rate. Many recent borrowers are in this group: in 2025, the median rate-and-term refinance closed at 6.00% and the median cash-out refinance at 6.50%, according to federal HMDA data on our refinance rates page.

Refinance rate predictions for 2027

Two widely cited housing forecasts both moved higher in October 2026, a month after the Fed raised rates. None of them expects 30-year rates to return to the 6% range in 2027.

Fannie Mae’s forecast PDF could not be opened directly; its figures are as reported by CNBC (October 14, 2026) and Florida Realtors (October 16, 2026). MBA figures are from MBA NewsLink.

Both forecasters also expect fewer refinances. Fannie Mae now projects about $430 billion in refinance originations in 2027, down from $802 billion in its September forecast, and the MBA expects refinance originations to fall about 17% to $571 billion. For today’s averages by loan type, see refinance rates today.

Refinance break-even: a worked example

Freddie Mac’s test is simple: “take the total cost associated with the refinance and divide it by your monthly savings.” The answer is the number of months it takes to earn the cost back.

Say you owe $320,000 with 28 years left, and a lender quotes a new 30-year loan at 7.25%, close to Freddie Mac’s 7.24% average. Closing costs are $9,600, or 3% of the loan, the low end of Freddie Mac’s range.

New payment $2,183 (principal and interest, 360 months at 7.25%). Current payments assume 336 months left. Closing costs of $9,600 paid at closing. Calculated by LenderMatch; illustrations, not quotes.

• At 8.25%, you break even in about three years. At the 6% end of closing costs ($19,200), it would take about 73 months, so the fee quote matters as much as the rate.
• The term resets. A new 30-year loan adds two years. Even so, at 8.25% the interest left on your current loan is about $501,400, against about $465,900 on the new one.
• Keep paying the old amount ($2,445) on the new loan and it pays off in about 21 years and 8 months, with about $315,100 in total interest. Check first that the new loan has no prepayment penalty.

Freddie Mac notes this simple test “will not work for cash-out refinances or if you are refinancing to reduce the term of your loan.” For those, compare total interest and total cost. Our refinance calculator does both, and when refinancing makes sense walks through the math in more detail.

Refinancing to remove PMI or shorten your term

Two reasons to refinance have little to do with where rates are headed.

Removing private mortgage insurance (PMI). On a conventional loan you may not need to refinance at all. The CFPB explains that you can ask your servicer to cancel PMI on the date your balance is scheduled to reach 80% of the home’s original value, if you have a good payment history and meet other conditions, and that it generally ends automatically at 78%. A refinance can help when your home has gained value: after a refinance, the “original value” is the appraised value at that time, and the CFPB notes PMI usually applies to a conventional refinance only “when your equity is less than 20 percent.” Weigh the PMI you would drop against any increase in rate. FHA loans follow different rules; see refinancing FHA to conventional.

Shortening your term. Freddie Mac’s 15-year average was 6.60% the week of October 29, 2026. In the example above, a 15-year loan at that rate would cost about $2,805 a month, $360 more than the current 8.25% payment, but total interest would be about $184,900 instead of the $501,400 left on the current loan. Freddie Mac notes a shorter term helps you build equity faster and pay less total interest.

Cash-out refinance vs HELOC: use the blended rate

A cash-out refinance replaces your whole mortgage with a bigger one at today’s rate. A HELOC leaves your mortgage alone and adds a second line for the extra amount. When your current rate is below today’s, the question is what you pay on all the money combined.

Say you owe $280,000 at 5.00% and need $60,000.

• Cash-out refinance: a new $340,000 loan at an example rate of 7.50%. All $340,000 now costs 7.50%, and the payment is about $2,377 a month over 30 years.
• HELOC: keep the 5.00% mortgage and draw $60,000 at 8.00% (prime 7.00% plus an example 1.00 margin). The blended rate on the $340,000 is about 5.53%, and the line costs $400 a month interest-only during the draw period.

Even though the HELOC’s rate is higher than the cash-out rate, it applies to far less money. The math flips when your current rate is close to or above today’s. Run your own numbers in the blended rate calculator, read how a cash-out refinance works, and see our cash-out refinance vs HELOC comparison. Where HELOC rates may go next is covered in will HELOC rates go down in 2027.

Should I wait for rates to drop before refinancing?

Current forecasts don’t expect a meaningful drop in 2027. The MBA expects the 10-year Treasury yield to average 5.1% in the fourth quarter of 2026 and stay close to 5% through 2027, and the Fed’s September 2026 projections show no cut in its policy rate through the end of 2027. The chief economist of the National Association of Realtors said on October 15, 2026 that he does not “see a major drop coming.”

Forecasts are not guarantees, and they have moved fast: Fannie Mae’s 2027 rate forecast rose from 6.7% to 7.5% in one month. A practical approach:

• If your break-even comes well before you expect to move, waiting is a bet against the forecasts.
• If it doesn’t, there is nothing to lock in now. Rerun the numbers when rates change.
• If you refinance now and rates fall a lot later, you can refinance again, though you pay closing costs again.

Frequently asked questions

Is now a good time to refinance my home?

For a rate-and-term refinance, mostly if your current rate is about 8% or higher. Freddie Mac’s 30-year average was 7.24% the week of October 29, 2026, so a lower rate alone rarely pays back closing costs quickly unless you are about a point above that. Removing mortgage insurance or shortening your term can be reasons on their own.

Will refinance rates go down in 2027?

The October 2026 forecasts say no. Fannie Mae’s economists expect the 30-year rate to average 7.5% in every quarter of 2027, and the Mortgage Bankers Association expects rates to remain above 7% through 2027. Forecasts can change quickly: in September, Fannie Mae expected 6.7% for 2027.

Is it worth refinancing for 1 percent?

Often. In our example, going from 8.25% to 7.25% on a $320,000 balance saves about $262 a month, so $9,600 in closing costs pays back in about 37 months. If you will keep the loan longer than that, the refinance usually comes out ahead.

Should I refinance now or wait?

Run the break-even math on a real quote. If you recover the costs well before you expect to move, waiting is a bet that rates fall, which current forecasts do not expect. If the math does not work today, you can rerun it whenever rates change.

Should I do a cash-out refinance or a HELOC in 2027?

Compare blended rates. If your current mortgage rate is well below today’s, a HELOC on just the extra amount often keeps your overall rate lower than refinancing the whole balance. In our example, a $280,000 mortgage at 5.00% plus a $60,000 HELOC at 8.00% blends to about 5.53%.

Does LenderMatch check my credit?

No. LenderMatch never pulls your credit. A lender you choose may check it, with your permission, when you apply.

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