The Landlord Lens - Mortgage Rates Hit 1 Year Low! What You Need to Know

Episode Date: November 7, 2025

The Federal Reserve just cut rates, and mortgage rates have dropped to their lowest levels in nearly a year. But what does that actually mean for landlords, investors, and anyone thinking about buying a rental property right now? On this episode of The Landlord Lens, John and Seamus break down how much this rate drop really affects affordability, cash flow, refinancing opportunities, and long-term investing strategy.Yes, mortgage rates falling from the 7%+ range into the low 6’s can change monthly payments by a couple hundred dollars. But when you zoom out, there are broader forces at play: inventory is rising, housing prices may flatten or soften, rent growth is slowing, and not every deal suddenly becomes profitable just because the interest rate went down.

the Fed cut rates, and that has actually impacted mortgage rates. It's at the lowest it's been in a year. From the high of like 7% down to where things are sitting right now in the low 6s, that's not nothing, right? But when you think about affordability, there's so many other factors at play. Hey, everybody. Welcome to another episode of The Landlord Lens. I am joined as usual by the delightful co-host himself, Seamus Nalierce.

Seamus, how are you this fine Wednesday? John, I am great this fine Wednesday, and I know you're excited about something, so maybe you share with our audience, what's got you so excited and giddy today? Oh my goodness. So you guys might have heard the Fed cut rates, and that has actually impacted mortgage rates. It's at the lowest it's been in a year, which thrills me because I think this is exactly what the housing market needs to increase the buying power of the average American and make some rental properties now look like really great deals. I'd say I hate to rain on your parade, but I love raining on your parade, John. You're right. The drop that we're seeing from the high of like 7% that we've had so far in 2025 down to where things are sitting right now in the low sixes, it does amount to about $200 difference in your mortgage payment per month. So that's not nothing, right?

But when you think about affordability, there's so many other factors at play that would change the price. of housing and change the price of rent for our landlords that you really got to take into consideration before you get too excited just because of the mortgage rate drop. Well, I don't know. I mean, $200. That's like 20 latte at Starbucks. Yes, John. For those of us that measure our wealth in pumpkin spice lattes at Starbucks. Most people. Yes. Some people do. But when you're thinking about cash flowing a new rental property, that $200 difference, it may be the difference between the red and red and the black, but it's not necessarily a game changer in terms of difference, right?

What matters a lot more is the deal you're getting on the property itself that you're purchasing, and that mortgage rate in itself plays a relatively small role. And I think what people forget, too, is mortgage rates, yes, it's a fixed rate for 30 years. Those are the mortgage rates we typically cite, but you can refinance at any time, right? And so no landlord's mortgage rate, in my opinion, should actually be fixed in the way that we think about it as in the same over 30 years, because we should always be taking of opportunities in the market and trying to refinance where possible. You're saying, okay, maybe this doesn't unlock a bunch of new cash flowing deals, but shouldn't I be excited for my rental property asset value? Won't that be going up because interest rates are down? that's not necessarily going to be the case.

So right now the amount of housing inventory in the United States, so this is houses available is over $2 million in the month of October. That's up about 10% year over year from last year. So what that means is there's actually a lot more supply right now on the market that I think regardless of mortgage rates is going to start driving the price of homes down. And that's going to create downward pressure, price of homes. and as the price of homes drops and it becomes more affordable to buy a home, you'll also see downward pressure on rent.

If you compare the worst time to buy by mortgage rates this year to the best time to buy now in terms of mortgage rates, you only make, you're basically getting a margin of $200 extra in there that could be going towards cash flow. What is the good news here? Does this mortgage rate drop even matter? It matters a little bit, and it matters especially to. to some people. So if you bought up the high in 2023 of 7.9%, the difference between that mortgage rate and what you can get today is $800 a month. Oh. So that is, and this is using the average

home price in the United States, which I know shocked us is now $512,000, which is wild. Yikes. But using that, that $800 swing is is huge, right? So it really just depends on when you came in on your property. Um, I think for people, people looking to build their portfolio over time, I don't think now is a terrible time to buy. I actually think that housing prices, like I said, because of all the extra inventory, will stay flat to even drop down here in the near future. And so I think being out and looking for new deals, especially some of these houses that have been on the market, they've been on the market, they're taking off the market, put back on the

market, taken off the market, put back on the market. I think there's probably a lot of deals out there for landlords that are looking to to expand their portfolio. I just think it's important to know that you may not cash flow right away as you, as you purchase these properties, but now it's not a bad time to buy. Gotcha. Okay. That is all very useful to understand about the asset value likely not to change too much due to the increased inventory on market and that this mortgage rate drop actually does save a lot if the last time you were in market was 2023. So why do you think there's all

these videos out there then and articles about the mortgage rate drop because it doesn't sound like it's the insane, you know, life-changing event for the real estate investor that it's being made out to be. A lot of us are holding on to the good old days, which apparently is just back in from 2019 to 2022 when interest rates were so low and people were finding mortgages for under 3%. But when you look at the history of the United States over the last 25 years, that's the outlier. Yeah. Today is really the norm, which is another reason why I think if you're looking to expand your portfolio, you've been saving money and you're ready to push forward, now's as good a time as any, because I don't think you're going to feel like a sucker because mortgage rates drop a

whole bunch over the next year or because home prices drop a ton over the next year. I think things will be relatively static. I have a slightly different take. Let's hear it. Maybe not a super different take, but just a commentary on the whole situation. I think the people who are making the big news about the drop in this mortgage rate and the major impact it's going to have probably are catering to the type of investor that got in in that era when it was really easy.

It was really easy to find cash flowing deals that felt great to buy and felt really great to own for two, three years still probably feel good to own if you bought in that period before the prices went way up. And I bet those people are feeling it in their view count, their click count, that that's dropping, right? The amount of people who just go to a mortgage calculator and check in and see, hey, that deal I drove by the other day in my town, will that cash flow? Absolutely not. It will not. Absolutely not cash flow at current rent rates. And they're not clicking on your video anymore because they don't feel like there's even an opportunity for them to learn. It's like that Warren Buffett quote that when the tide goes out, you see who's swimming naked, right?

Like I think that's kind of happening at a large level. And all of these content creators have a big agenda to push this narrative of it's going to be easy again soon, guys, I promise to keep the viewers. That's my theory. The theory makes sense, right? People are interested in how what's happening outside their control, right? The macroeconomics, the federal government things they're doing impact their wallet. And so I get why people would be interested. I think the mortgage, I think lenders right now have more to, have the most to gain for

whipping up a frenzy and getting people to look at whether now is a time of refinance. And depending on where, what your interest rate is at, now might be a great time to refinance, right? If you were at the high, 7%. Yeah. If you were at the high and you can cut $800 off your mortgage, that's an absolute game changer. So I think there's some news here. I'm not so sure that it will create a frenzy in either the housing market or will substantially change the landlords that might be watching out there, their rental situation. Cool.

Okay. Shamis, thank you for bringing your sage-like wisdom and calming me down from my excitement about this drop in mortgage rates. Clearly, I was stupid. John, killing your buzz is one of the best parts of my day. Perfect. Love to hear that from my boss. All right. Thanks everybody for tuning in to her landlord lens. Leave a comment if you have a different opinion about what this mortgage rate drop means for you in your rental business or for the housing market in general. And like and subscribe for more content like this. TurboTenant is the all-in-one platform for landlords to manage their rental properties. From vacancy to tenancy, we have you covered with industry-leading tools and expert advice. better from anywhere for free at turbotenant.com.