Homebuyers in Illinois and across the country have a chance to buy a home at 3-year mortgage rate lows. In this post, we will explain how lower mortgage rates can be a game-changer for homebuyers and homeowners alike. First, let’s discuss the drop in rates and how it fits into current events.
What to Know About the January 2026 3-Year Mortgage Rate Low
This year, the midterm elections take place. This is likely a factor in why the administration recently compelled the Federal Housing Finance Agency to buy $200 billion worth of bonds from Fannie Mae and Freddie Mac, driving down mortgage rates, a move designed to appeal to voters.
In other relevant news, the new CPI Inflation Report shows only a rate of 0.2%. That is not as high as the 0.3% that was predicted. The report indirectly affects mortgage rates.
How Lower Mortgage Rates Help Homebuyers
Many prospective homebuyers try to time their home purchases to take advantage of lower mortgage rates. This can lead to putting off a home purchase in some scenarios, especially when budgets are tight.
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Today's Mortgage RatesIf that describes you, you may want to consult with a mortgage calculator. Put in the new interest rate of 6.06%, and see if monthly payments would be within your budget. You might also want to put in last January’s 7.04% for comparison. Do not be surprised if you discover that monthly payments with the 6.06% interest rate could save you hundreds of dollars a month compared to last year’s mortgage rate.
Calculate what you could save over the term of your mortgage, and the number may be in the tens of thousands.
For some people, homeownership may have been out of reach a year ago, but within reach now. It’s smart to take advantage of the opportunity while it is here.
If you decide on a fixed rate mortgage, the rate you lock in when you buy your home will stay the same for the entire lifetime of your mortgage.
Even if mortgage rates or other bills or costs rise, you will not have to pay more interest each month, just the same as when you bought the home.
Refinancing to Lower Rates Can Also Help Homeowners
What if you already have a home, and you bought it when interest rates were higher? You are not out of luck. You can also take advantage of the reduction in mortgage rates while this window of opportunity is open.
A refinance can lower your mortgage rate to match today’s market rates. If you make it a fixed rate, that is what you will pay going forward for the lifetime of the loan.
Refinancing is not free, so you will need to calculate what it would cost you to refinance. Then, compare that to what you could save with a lower mortgage rate. If the savings exceed the costs, then refinancing makes sense.
During your consultation, you can tell us about your scenario, and we can help you figure out whether refinancing could save you money. We’ll take care of the calculations and go over the pros and cons with you so you can make an informed decision.
Buy a Home in IL or Beyond
MidAmerica Bancorp, Inc. is based in Oak Lawn. We work with homebuyers and homeowners in the Chicagoland area and the rest of Illinois. We are also licensed to work with borrowers in Florida, Indiana, Michigan, Tennessee and Wisconsin. Please give us a call at (708) 237-4050 to schedule your consultation to take advantage of competitive mortgage rates.
Do you know how much home you can afford?
Most people don’t... Find out in 10 minutes.
Today's Mortgage Rates
