Falling Loan Rates

October 25, 2024

If you've been considering financing a new car or home—or refinancing your current loan—there’s no better time than right now. The Federal Reserve recently cut its benchmark interest rate by 0.50 percentage points, its first reduction since 2020. That allows financial institutions to offer loans to members at lower rates than we’ve been able to this year. The rate cut is beneficial to borrowers seeking to finance or refinance auto or home loans, by lowering monthly payments and paying less in financing charges over the repayment period.

Home and Auto Loan Financing and Refinancing

Interest rates are crucial when financing a home or auto loan. Securing a lower rate when you finalize your loan can significantly reduce how much you pay over the life of a loan. If you're purchasing a home or car, now is a great time to explore current rates and lock in a favorable deal. Even a small reduction can translate into thousands of dollars in savings over time.

Since rates are expected to continue dropping in 2025, should you wait on refinancing? This depends on your current rates. Refinancing your home loan now might be the right move if your monthly interest payments are 1 or 2 points higher than the current mortgage rates. In the coming months, you can enjoy a decrease in your monthly payments, and if rates continue to drop as expected, you can refinance again. When refinancing, consider keeping payments the same and shortening the loan term. This will allow you to pay off your loan faster and save on interest in the long term. Lowering your home or auto loan payments frees up your cash for other financial priorities. Complete a loan application now to get pre-approved for a new loan or a refinance.

Lock in Savings Rates

Although the loan rate drops are positive for borrowers, this also means that savings accounts will likely see lower yields. That’s why now is the best time to open a fixed-rate savings account. CASFCU Share Certificates provide a fixed return and a variety of terms to choose from. Choosing a share certificate term of one year or greater is recommended, in order to hold on to the current rate for as long as possible.

Act now!

Are you ready to grow your long-term savings while you spend less on monthly payments? Visit our branch or call us at 624-9094 today to review your options!