Should you lock in a mortgage rate before the January Fed meeting?

Mortgage interest rates were so high for so long that it would be understandable if many buyers missed the tangible decline the product experienced in 2025. While not quite as significant a drop as was seen at the start of the decade, mortgage rates, on average, declined by more than a full percentage point last year. And at multiple points in recent months, they've been at or hovering near 3-year lows. With a variety of rates comfortably under 6% now, many buyers may feel compelled to take action and lock in an affordable one while they still can.

At the same time, there is another Federal Reserve meeting on the calendar for the end of January. And the central bank has cut interest rates three times in its last three meetings. Fed rate policy, while not the only factor, does go a long way toward driving mortgage rates up and down. In this climate, then, should buyers wait for the Fed meeting to conclude on January 28? Or should they proceed to lock in a mortgage rate right now, before that meeting even starts? For many, the latter move could be the right one. Below, we'll explain why.

Start by seeing how low your current mortgage rate offers are here.

Should you lock in a mortgage rate before the January Fed meeting?

Not sure if it's worth locking in a mortgage rate right now? Here are three reasons why it may be the right move:

Yes, because mortgage rates are already in the 5% range

When was the last time you could secure a mortgage interest rate in the 5% range? And when was the last time you had multiple mortgage interest rate options in the 5% range? It's been quite some time since buyers had these affordable rates to explore, but that's exactly what they can once again expect to be offered right now (assuming they have good credit scores and clean credit histories). 

Waiting, then, to lock in a mortgage rate may not always be risky, but it may not even be required if one of today's rates can already fit your budget and meet your goals. Just be sure to shop around and get quotes from multiple lenders in order to improve your chances of obtaining the lowest rate available.

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Yes, because the chances of another Fed rate cut this month are low

Just 5%. Those are the odds of another Fed rate cut when the central bank meets again on January 28, according to the CME Group's FedWatch tool. It doesn't make sense, then, to delay locking one of today's lower mortgage rate offers if the bank isn't going to cut its benchmark interest rate later this month anyway. And with the reality that the Fed is just one factor influencing mortgage rates (albeit a major one) and with no Fed meeting on the calendar for February anyway, waiting until March for some movement here isn't advantageous, especially if today's rates are already affordable.

Yes, because many lenders will allow for a mortgage rate float down before closing

It can take months between having an offer accepted on a property and the actual closing date on that property. And mortgage interest rates can and potentially will decline during that period. So locking a rate now doesn't make sense, right? Not necessarily. By locking one of today's rates in now, you can be assured that it won't rise any further. 

And, if rates actually do decline, many lenders will allow you to float your current rate down to the new, lower one (for a fee). By locking in today, you'll secure a win-win: you know you won't pay a higher rate (and can budget accordingly), but you'll still position yourself for a float down option should rates decline considerably before you formally close on the home.

The bottom line

With the mortgage interest rate climate evolving in a more favorable way for borrowers (the first time this has consistently happened in years) it can be tempting to wait for further changes before locking in a mortgage rate, especially with another Fed meeting scheduled for later in January. 

However, with rates here already consistently in the 5% range, the chances of another Fed rate cut at the end of the month are very low, and the reality is that many lenders will allow for a mortgage rate float down if rates do decline before closing, so waiting for a rate lock may not be beneficial right now. So, consider speaking with a lender. They can answer any specific questions you may have and better help you build a strategy to take advantage of this new, more affordable rate climate right now.