3 things that may become cheaper now that the Fed cut rates

Another month, another Federal Reserve interest rate cut.

For the second time in as many months, the central bank reduced interest rates on Wednesday by 25 basis points. Now at a range between 3.75% and 4.00%, the federal funds rate is down by a half percentage point from where it was on September 16. And the central bank may not be totally done cutting, either, with another rate reduction in the same amount widely expected at its December meeting.

While that may not be the news savers want to hear after becoming accustomed to high returns on select savings vehicles in recent years, it opens up new opportunities for borrowers previously saddled with high rates on a variety of products. And while it may take some time for rate cuts to effectively reverberate throughout the economy, some products may immediately become less expensive now. Below, we’ll detail three that are worth knowing about in this new, cooler rate climate.

Start by seeing how low your current mortgage rate offers are here.

3 things that may become cheaper now that the Fed cut rates

Here are three borrowing products that may respond positively to today’s Fed rate cuts (and others still to come):

Mortgages

Mortgage interest rates fell to a then-two-year low in September 2024, right before the Fed cut rates that month. And they declined to a three-year low in September 2025, right before the Fed cut rates again. As of Wednesday morning, rates here remained at that three-year low, but they could soon fall further as today’s rate reduction impact is more widely felt. 

And that’s good news for both buyers, many of whom were offered the highest mortgage rates in decades just a few years ago, and current owners saddled with elevated rates looking to refinance. It’s also important to note that lenders respond differently to Fed rate cuts, so it’s worth taking the extra time to shop around for rates to see how low of an offer you can really find now.

Shop for mortgage rates and lenders online now.

Home equity lines of credit (HELOCs)

HELOCs have variable interest rates that can be risky for borrowers in a rising interest rate climate. But considering that the Fed has cut rates twice now in the last six weeks, it’s becoming clear that this is not that climate. 

HELOC rates have actually been falling dramatically over the past 13 months or so, down more than two full percentage points from the 9.99% they averaged in September 2024. And they’re now well positioned to decline again. That makes this an attractive borrowing option for homeowners and a more affordable one for current HELOC users, as the rate here changes independently each month, so refinancing and paying refinancing closing costs aren’t necessary.

See how low your current HELOC rate offers are here.

Personal loans

Need to borrow money but don’t want to leverage your home to do so? Then a personal loan could soon become an affordable way to do so. While the average personal loan rate is now 12.25%, it could soon head closer to 10%, depending on how lenders respond to these ongoing cuts. 

And while 10% would still be higher than the 7% range HELOCs fall in, personal loan rates are fixed, and you won’t be risking foreclosure if you ultimately fail to make payments as agreed to, as you would with a HELOC. So consider exploring your personal loan options now. They may soon become a more cost-effective way to borrow.

Learn more about your personal loan options now.

The bottom line

Mortgages, HELOCs and personal loans are all set to become more affordable amid the ongoing Fed rate-cutting campaign. But rates here can and will change often, so it’s important to monitor the interest rate climate for timely opportunities to act. And remember that no matter how cool the interest rate climate becomes, the lowest rates and best terms for all three products will be reserved for borrowers with good credit scores. Consider checking your credit report, then, as your very first step.