Mortgage rate locks look tempting before July’s Fed meeting
Borrowers face a choice before the Fed meets July 28: secure today’s mortgage rates or gamble that better terms arrive later.
By Frankie Delgado · News Reporter
3 min read
The Federal Reserve’s next two-day meeting begins July 28, and homebuyers are watching for one thing: any hint that borrowing costs could climb again before the year is out.
The central bank is widely expected to leave the federal funds rate unchanged this month, according to CBS News. But the press conference after the meeting may matter more for mortgage shoppers than the decision itself, because any signal about future rate policy can ripple into home loans.
Mortgage borrowers had some relief in 2025, CBS News reported, before rates moved higher in the spring after a rise in overseas conflicts and inflation. That happened even while the Fed kept its own rate steady.
For buyers and homeowners thinking about refinancing, the question is whether to lock a rate now or wait and hope for a better deal.
Why a lock can help
A mortgage rate lock gives borrowers a firmer number to build a budget around. Zillow listed the average 30-year purchase mortgage rate at 6.75%, while the average 30-year refinance rate was 7.20%.
Those rates are a far cry from the lower offers available in the recent past, but a lock can still bring certainty. A borrower who locks knows what the monthly payment is expected to be, rather than waiting while the market moves.
That certainty can be useful for buyers trying to close on a home or homeowners weighing whether a refinance makes financial sense now.
Why waiting still has appeal
The catch is that locking today means accepting rates that are higher than some borrowers could have found not long ago. CBS News reported that in December, some borrowers may have been able to find a 30-year purchase mortgage at 5.99% or a 15-year refinance at 5.56%.
Those offers are no longer widely available, according to CBS News. Borrowers who lock now may be doing so because today’s rate is the least painful choice, rather than a bargain.
Mortgage points are one way to push a rate lower. CBS News noted that paying points can help borrowers secure a rate below the current average, though that comes with an upfront cost.
The risk of waiting
There is also no promise that rates will improve after the July meeting. According to CME Group’s FedWatch tool, the odds of a September interest rate hike were around 75%, while expectations for the Fed’s October meeting varied.
If borrowing costs rise later this year, today’s rates may look better in hindsight. That is the main argument for locking before the Fed speaks.
Refinancing is not a free escape hatch
Some borrowers may be tempted to take a mortgage now and refinance later if rates fall. CBS News cautioned that refinancing brings closing costs and may change the payoff timeline, depending on the new loan term.
That means a future refinance can reduce the rate but still cost money upfront, and it may not deliver the savings a borrower expects.
The best choice depends on the borrower’s finances, timeline and view of where rates are headed after the Fed meeting. CBS News suggested borrowers speak directly with lenders, since rates and terms available through a lender may not always be displayed on its website.
This story draws on original reporting from CBS News.