A Rate Drop Could Increase Your Buying Power by $40K Without Raising Your Payment

By Kyle Koller

Producing Branch Manager of UMortgage West - The #1 Producing Team at UMortgage

If rates dip just half a percent, you could afford $40,000 more home without paying a dollar more each month. Sounds like a dream, right? It’s tempting to wait for that drop, but doing so could mean missing out on the right home that’s available right now.

I recently worked with a client who was waiting for the “perfect” rate before moving on to their dream home. They figured they’d have plenty of time once the Federal Reserve announced a cut. The problem, however, is that mortgage rates often move before the Fed makes an official move. By the time the news breaks, the market can already be packed with eager buyers.

To get the most out of the current market, here are three key points you need to know:

1. Rates can move ahead of the Fed. Mortgage rates follow bond markets and investor expectations, not the Fed’s short-term rate. When investors think cuts are coming, rates can adjust early. In past cycles, rates have dropped by half a percent weeks before any official announcement, catching many buyers off guard.

2. Effect on your buying power. At 7%, a $500,000 home with 10% down costs about $2,994 per month. At 6.5%, that same payment could buy you a $540,000 home or save you roughly $154 a month. That’s a big jump in buying power, or extra breathing room in your budget, without changing your monthly payment.

3. The market impact. Lower rates bring more buyers into the market. When demand jumps, prices can rise quickly. Being pre-approved now means you can act before competition drives prices higher. Waiting until rates fall could mean paying more for the same home.

Why does this matter for everyone? When mortgage rates shift, the ripple effects touch every corner of the market, from buyers and sellers to investors.

● Buyers: A lower rate can stretch your budget or reduce your payment, opening doors to more homes.
● Sellers: More affordable financing can bring more buyers to your listing.
● Investors: Lower rates can improve cash flow on rental properties.

Why should you act now? Experts expect rates to hover in the mid-6% range for now, with gradual declines possible through late 2025 and into 2026. If rates fall, buyer demand could surge almost overnight.

Getting pre-qualified now puts you in the best position to lock in a great rate before competition picks up and before rising prices cut into your savings. It’s quick, secure, and won’t affect your credit.

If you want to know exactly how a rate change could impact your budget, let’s run the numbers together. I’m offering a free, no-obligation mortgage rate quote so you can see your options and how much you could save.

Here’s what you’ll get:

● Competitive rate estimates tailored to your situation
● A clear breakdown of your loan options
● Guidance to help you avoid costly delays and fees

By getting a head start now, you’ll be ready to move the moment rates improve. If you’d like to walk through your numbers, you can book a free call with me using this link: Schedule a 1:1 call with Kyle.

You can also reach me at (801) 687-2018 or kkoller@umortgage.com. I look forward to helping you achieve your homeownership goals.