Will mortgage rates fall after this week's Fed meeting?
The first Federal Reserve meeting of 2026 is scheduled to take place this week, and talk over the future of interest rate cuts is expected to tick up again.
The Fed reduced its benchmark interest rate in its last three meetings in September, October and December, going a long way toward reducing mortgage interest rates for both buyers and owners hoping to refinance. And with multiple mortgage interest rate options already under 6% now, both groups could be hoping for an additional rate cut this week to help push rates even lower.
But the drivers behind mortgage interest rates are multiple, with the Fed being just a single, albeit powerful one. Still, knowing what to expect here can go a long way toward determining your next mortgage move (or lack thereof). So, what are the chances that mortgage rates will actually decline after this week's Fed meeting? That's what we'll break down below.
See how low your current mortgage rate offers are here.
Will mortgage rates fall after this week's Fed meeting?
With the odds of a Fed rate cut at just 3% this week, according to the CME Group's FedWatch tool, the chances of any decline in the mortgage rate space appear very low now.
But while the federal funds rate is likely to remain at the current range of 3.50% to 3.75%, comments made after the meeting by Fed chairman Jerome Powell have the potential to shake up the markets and impact mortgage rates further. If Powell talks positively about the possibility of a Fed rate cut in March (there's no meeting scheduled for February), the market could respond well and rates may tick down slightly. But if comments are muted or even hint at higher rates for longer, the response could be a negative one.
It's also important to remember that mortgage lenders take guidance from the Fed, but they aren't directly dictated by the central bank's actions in either direction. This is why mortgage rates declined last year to 3-year lows, right before the Fed cut rates (the same dynamic occurred in September 2024). Still, the consistent cooling in the interest rate climate sparked largely by the Fed's cuts last year looks stalled now, at the end of January. So homebuyers and owners hoping to refinance may need to switch tactics if their initial plan was to wait for yet another Fed rate cut.
Lock in one of today's lower mortgage interest rates now.
How to get a below-average mortgage rate right now
With mortgage purchase rates in the 5% range currently, borrowers looking for an even lower rate should familiarize themselves with the ways in which they can secure one. Shopping around for mortgage lenders has been shown to save buyers via a rate that's between half a percentage point and one full percentage point lower than what they'd otherwise receive. Tacking on mortgage points, which serve as a fee to the lender in return for a lower rate, can also be worth exploring as can adjustable rate mortgages. The latter type can be risky for those uncertain about their budget but the potential savings can also be significant, as long as there's a reliable plan in place for dealing with a changing rate in the future.
Current homeowners have effective ways to secure a lower rate, too. They can also shop around for lenders as there's no requirement to refinance the home with the same lender they purchased it with. Refinancing with mortgage points or into an adjustable-rate mortgage can also be worth exploring. A 15-year term is viable now, too, with an average rate of just 5.37%. While a shorter term will likely come with bigger monthly payments thanks to the payoff timeline (depending on how much you still owe), the interest savings may be worth that exchange. Take the time to crunch the numbers, then, to see what your new payments could look like.
The bottom line
The likelihood of a material drop in mortgage interest rates after this week's Fed meeting, unlike the last three, appears to be low right now. But with mortgage rate options plentiful under 6% now and multiple ways to secure a rate that's even lower for qualified borrowers, waiting for the Fed to make a move may not even be necessary. Instead, use this lull in Fed rate activity to shop around for lenders to see what you may actually be offered. You may be pleasantly surprised with what's already available right now.
