If you’re waiting for rates to drop before you buy, I get it. The 30-year fixed averaged 7.18% for the week ending November 5, 2026 (Freddie Mac Primary Mortgage Market Survey), and the 30-year FHA rate averaged about 6.94% on November 6, 2026 (Mortgage Reports). That’s the market we’re in. Complaining about it doesn’t change your payment — doing the math does.
So here’s the math, and here’s how I decide whether paying for a lower rate beats waiting for one.
What a point actually is
A point is 1% of your loan amount, paid up front, to buy your rate down. As a rule of thumb, one point buys about 0.25% off your rate. On a $687,321 loan — a $700,000 house on FHA with 3.5% down — one point is $6,873. That is not a fee. It is a purchase: you are buying a lower rate for the life of the loan, or until you refinance or sell.
And ask who pays the point. If the seller pays it, the breakeven is zero months. That’s a negotiation, not a product — and it’s the best deal in the book when you can get it. I explain when that works in Seller Concessions: How to Get the Seller to Pay Your Closing Costs (2026).
The 60-month buydown test
Here is the test I run on every buydown. Take the same $687,321 loan:
| Rate | Principal & interest per month |
|---|---|
| 6.94% | $4,545 |
| 6.69% (after 1 point) | $4,430 |
| Savings | $115/month |
One point costs $6,873. It saves $115 a month. $6,873 ÷ $115 = 60 months. That’s your breakeven. If you keep the loan longer than 60 months, the buydown pays for itself — and after month 60, you’re ahead every month. If you sell or refinance before 60 months, you paid $6,873 for nothing. That’s the whole test. Will you keep this loan for more than 60 months?
When paying points makes sense
- You’re staying in the home long-term — 7+ years, and you’re not planning to refinance soon.
- The seller is paying the point. Breakeven is zero months. Take it.
- The monthly savings matter to your budget — $115 a month is real money, and it changes what you can afford.
When waiting beats paying
- You’re moving in under five years. You won’t hit the 60-month breakeven.
- You expect to refinance soon. If rates drop and you refinance in year two, the point is gone.
- The cash matters more than the rate. $6,873 in your pocket is worth more than $115 a month if you need the cash for closing costs, moving, or a cushion.
When the seller pays, it’s a different answer
Here is the part that changes the math completely. If the seller gives you a $6,873 credit, you can use it two ways: as a price cut, or as a buydown. As a price cut on a $700,000 house, it saves about $45 a month. As a buydown, it saves $115 a month. Same $6,873, more than twice the monthly savings. That’s why I always check the buydown first when a seller credit is on the table.
That’s exactly what my November 18 webinar is about: “Price Reduction or Seller Credit?” — when to ask for a price cut and when to ask for a credit. Wednesday, November 18, 2026, 10:00–11:00 AM PT.
What waiting actually costs
Waiting is not free. If you pay $2,500 a month in rent while you wait a year for rates to drop, that’s $30,000 gone — and you have nothing to show for it. And here’s the part people miss: your rate can change later. You can refinance when rates come down. You cannot get back the year of rent, and you cannot get back the price increase while you waited. California’s median home price was $899,720 in September 2026 (California Association of Realtors, released October 19, 2026), up 1.7% from a year ago.
And rates have actually been falling. Freddie Mac’s survey went 7.40% (October 15) → 7.32% (October 22) → 7.24% (October 29) → 7.18% (November 5, 2026). That 22-point drop saves about $103 a month in principal and interest on a $700,000 FHA loan. If you’re waiting for a big drop, you may be waiting a while. A quarter-point is $115 a month. That’s real money — but it doesn’t turn a house you can’t afford into one you can.
When waiting is the right move
Sometimes waiting is right. If the payment doesn’t fit your budget comfortably, don’t buy. If your credit needs work — below 620, or with issues to fix — wait and fix it, because a better score is worth more than a lower rate. If your down payment is short and you need time to save, or if down payment assistance programs can cover it, wait and use them. And if you’re not sure you’ll stay in the area for five years, renting is the right call.
But if the payment works and the price is fair, waiting for a perfect rate usually costs more than it saves. The rent you pay while you wait, and the price increase while you wait, are the costs nobody puts in the spreadsheet.
Dat’s take
Don’t pay for a lower rate unless you’ll keep the loan long enough to earn it back. And don’t wait for a perfect rate while rent and prices eat the money you saved.
What to do with this
- Run the payment on your price in the Mortgage Payment Calculator — full payment, tax and insurance included.
- Ask your agent whether a seller credit is realistic on the house you want, and join the November 18 webinar.
- Listen to Episode 29, “When Is the Right Time to Buy Your First Home?”, for the full discussion.
- Then start your pre-approval and I’ll run your exact numbers — including whether a buydown makes sense for you.
Buydown example: FHA loan $687,321, 30-year fixed. 6.94% → 6.69% with one point ($6,873), saving $115/month, breakeven 60 months. Verified by two independent calculations (AI estimate and lender formula). Rates from Mortgage Reports (November 6, 2026) and Freddie Mac (November 5, 2026). This is education, not a rate quote or a loan approval. Dat Nguyen, Certified Mortgage Advisor, NMLS 1379110.