Homeowners who bought in 2025 with the expectation of refinancing may not see savings unless interest rates fall by at least 0.75 percentage points, according to a report released this week by Neighbors Bank.

The national analysis modeled typical refinance scenarios across all 50 states using a 30-year fixed-rate mortgage of 6.8%, an average loan amount of $386,339 and $5,458 in closing costs. It found that smaller rate declines often fail to deliver short-term benefits.

Under the modeled scenario, a drop of 0.25 percentage points left borrowers $2,424 underwater after three years. A drop of 0.5 points resulted in break-even details ⇒

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