When it comes to homebuying, realtors like to say “marry the house, date the rate” — but the phrase makes Erin Sykes “cringe.”
“We’ve heard it a lot over the last few years,” “It’s not good advice.”
The phrase suggests that homebuyers should commit to a house — like a marriage — while treating the mortgage rate as something temporary — like dating — with the assumption that they can refinance later when rates drop.
But that expectation ignores the cost of refinancing, which can range from 2% to 6% of the loan balance — an expense that can add up to tens of thousands of dollars. If homeowners don’t stay in the home long enough, the savings from a lower rate may never outweigh those upfront costs, known as the break-even point.
Glossing over this point suggests that “refinancing is free, and it’s certainly not. And often, it doesn’t make any sense,” Sykes said in a recent LinkedIn video.
Another flawed assumption is that mortgage rates will drop — but that’s not guaranteed. Most forecasts expect 30-year fixed mortgage rates to remain above 6% through 2025 and beyond, with the possibility that they stay elevated for years.
After years of rock-bottom rates through the 2010s and early 2020s, “we just have this mindset of 2%, 3%, 4% interest rates,” even though the historical average has trended above 7%, says Sykes. While a drop from 6% to 3% would make refinancing an obvious choice, smaller declines — typically less than 1% — may not justify the cost.
“This expectation of coming down to 3% or 4% again is irrational, and that’s where a lot of people are alluding to when they say, ‘marry the house, date the rate,’” says Sykes, who believes 5% or 6% could be the new normal going forward.
In that case, getting a good home price matters even more. Refinancing isn’t always a sure bet. It’s smart for homebuyers to run the numbers, weigh the costs and consider professional advice from a trusted financial expert before assuming a future refinance will pay off.