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Mortgage interest rates change each day, and they can be difficult, if not impossible, to time.
Case in point: Mortgage rates, largely in anticipation of a Federal Reserve rate cut, dropped to a three-year low on September 17, averaging just 6.13% for a 30-year term. In the weeks that followed, however, rates increased a bit as the cut had a chance to reverberate throughout the economy. Concerns over inflation and other economic issues also hampered that decline.
But recently, mortgage rates have dropped again, falling in both of the past two weeks after a minor rise in early October. And they dropped back down to that three-year low mark this week, according to Mortgage News Daily. That drop is timed almost perfectly with the Fed’s October meeting and presumed 25-basis-point rate cut.
Now back at 6.13%, homebuyers have a critical question to ask themselves: Should they lock in a low rate now or wait for rates to drop again? For many, a move to secure today’s average rate may be the smart move. Below, we’ll explain why.
Start by seeing how low your current mortgage rate offers are here.
With mortgage rates back to a 3-year low, should you lock one in now?
Not sure if locking today’s average 6.13% mortgage rate makes sense? Here’s why it could be a smart (and cost-effective) move worth making:
It’s not uncommon for rates to rise after a drop, perhaps significantly
As was just illustrated in September and October, it’s not uncommon for mortgage rates to rise after a drop, perhaps to a significant degree, instead of continuing to decline in a straight line. And the dynamic shown in recent weeks isn’t a new one. It happened in September 2024, too, when mortgage rates dropped to a then-two-year low.
But in the weeks and months that followed, mortgage rates reversed course. And by January 2025, they were back over 7%. In other words, if you can afford today’s rate, even if not ideal, then it may be worth locking in with a lender anyway. You’ll be happy you did if or when rates head back toward 7%.
Lock in a low rate while you still can here.
Many lenders will allow for a float-down option
When shopping for lenders, don’t just look for the lowest rate and best terms. Be sure to ask about their potential float-down options, too. This is a particularly timely feature to explore now, as it will allow you to unlock the rate you previously secured and lock in a new, presumably lower one, before you formally close on the loan.
Ask lenders if they provide this option, and how much it may cost if they do. If available, this feature can give you peace of mind by knowing that your rate situation can only improve as you’re already locked in at a low rate, but that you can still be flexible and take advantage of an even lower one if it soon becomes available.
You can start budgeting and house hunting with precision
One of the most stressful parts of budgeting and house hunting in recent years surrounds the unpredictability of the mortgage rate climate. But by locking in today’s low rate, buyers will remove this volatility from the equation. They can start budgeting and house hunting with precision as they’ll accurately know which houses they can afford and which they will have to forgo.
And, if they lock in a rate now and start house hunting this fall, they may get ahead of increased competition and more frequent bidding wars, should rates be lower during the traditional spring homebuying season in 2026.
The bottom line
A 6.13% average mortgage rate may not feel particularly cheap, especially compared to the rates that were widely offered to buyers at the start of the decade. But, historically, they’re about in line with what they’ve always been. And if buyers lock one in now, they’ll protect themselves against any potential hikes still ahead, give themselves flexibility if they find a lender offering float-down options, and perhaps most importantly, allow themselves to start budgeting and house hunting with accuracy. Consider acting now, then, as today’s low rates can easily change overnight again. And don’t forget that you can always refinance your mortgage if rates move materially lower in the future.
