Should I Wait for Rates to Drop Before Buying?
The real question isn't just "will rates drop?" — it's "will the savings from a lower rate outweigh the cost of waiting?" This calculator shows you the math.
Your Scenario
Waiting 18 months costs you more than you save. The break-even point is 230 months after you buy — meaning you won't recoup the cost of waiting until 21 years from now.
6.8% rate
5.5% rate
Frequently Asked Questions
Should I wait for mortgage rates to drop before buying?
It depends on how long you plan to wait, how much rates drop, and how much home prices appreciate in the meantime. If rates drop 1% but home prices rise 5% while you wait, you could end up paying more overall. Use the calculator above to see the math for your specific situation.
What is the break-even point for waiting for lower rates?
The break-even point is how long you need to stay in the home after buying at the lower rate to recoup the costs you incurred while waiting — rent paid, higher down payment due to appreciation, and equity missed. If you move before the break-even point, waiting was not worth it financially.
How much does a 1% drop in mortgage rates save per month?
On a $400,000 loan, a 1% rate drop (e.g., from 7% to 6%) saves approximately $267/month on a 30-year mortgage. On a $600,000 loan, the savings are approximately $400/month. However, if home prices rise while you wait, your loan amount increases and partially offsets these savings.
What happens to home prices when mortgage rates drop?
When mortgage rates drop, more buyers enter the market, which typically increases demand and pushes home prices higher. This is why waiting for lower rates can sometimes backfire — the lower monthly payment may be offset by a higher purchase price and larger down payment requirement.
Is it better to buy now and refinance later?
"Marry the house, date the rate" is a common saying. If you buy now and rates drop later, you can refinance to capture the savings — without losing the equity you'd have built in the meantime. Refinancing typically costs 2-3% of the loan amount, so factor that into your break-even calculation.