Do You Think a Fed Rate Cut Means a Lower Mortgage?

By Jason Penrose

Jason has been licensed since 1999, and is currently one of the top 20 agents in Arizona for homes sold.

You’ve probably heard about the Federal Reserve’s rate cuts and wondered, “Does this mean my mortgage rate will drop, too?” Here’s the truth—there’s no direct link. Don’t worry; I’m here to help make sense of it so you can make the wisest choices with your money.

The myth of the federal funds rate and your mortgage. Here’s a common misconception: mortgage rates will follow when the Federal Reserve lowers the federal funds rate. It sounds logical, but mortgage rates are tied to the 10-year Treasury bond. That means mortgage rates increase when bond prices drop—and vice versa. So, even if the Fed slashes rates, your mortgage rate may not budge.

This little misunderstanding often creates a wave of excitement. Many start checking mortgage rates, thinking it’s a great time to buy or refinance. Sometimes, this burst of interest can impact the market itself.

Why does this matter to you? So, why should you care about this? Understanding what drives mortgage rates can help you make a wiser financial decision. While rate cuts may bring attention to the housing market, the real influence on mortgage rates is the bond market. Staying informed will help you take advantage of the best timing and options for buying or refinancing.

If you want to track mortgage rates directly, head to Mortgage News Daily. You’ll find real-time updates on rate changes, making it easier to stay in the loop without relying on headlines alone.

Ready to make your move? Buying or refinancing a home is a big deal. So, focus on what matters—the factors that impact your mortgage rate. By staying informed, you can make decisions that truly benefit you instead of being swayed by rate-cut news that might not even touch your mortgage.

If you have questions or just want some guidance, I’d love to help. Reach out anytime at 602-738-9943 or jason@thepenroseteam.com to discuss your options and make the most of the market. Understanding your mortgage doesn’t have to be complicated—let’s simplify it together. Stay ahead, make informed choices, and move confidently toward your goals.