From mortgages to auto loans, experts weigh in on when — or if — to refinance as interest rates fall
The Federal Reserve announced a half percentage point, or 50 basis points, interest rate cut at the end of its two-day meeting Wednesday. And, naturally, some Americans will want to make the most of the central bank’s first rate cut since the early days of the Covid pandemic.
“How quickly the impact of lower rates is felt depends on whether households have variable or fixed financing rates” said Stephen Foerster, professor of finance at Ivey Business School in London, Ontario, Canada. Some adjust fairly quickly, others don’t reset at all.
That is, unless you can refinance.
According to a recent report from Nerdwallet, 18% of consumers said they planned to refinance a loan once rates go down. The financial services site polled more than 2,000 U.S. adults in July.
While taking advantage of lower rates could make financial sense, there are often other considerations, as well, depending on the type of loan, experts say.
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