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Aarp Drops Major Guidance On Mortgage Rates, Owning Real Estate

I want to speak to prospective homebuyers and homeowners considering refinancing their mortgages about an intriguing new development regarding mortgage rates, newly reported by Mortgage News Daily.

From what I've observed through my years of reporting on real estate and other finance topics, it's a relatively rare occurrence when Mortgage News Daily's Chief Operating Officer Matthew Graham releases an early report.

He did exactly that on Feb. 23.

"This coverage is coming out earlier than normal due to a more interesting headline than normal," Graham wrote. "The average top-tier 30-year fixed rate fell back to 5.99% today, matching the levels seen only briefly back on Jan. 9, 2026 when the Fannie/Freddie bond buying plans were announced."

That mortgage rate is an important event to follow because it marked the first time the 30-year fixed rate fell below 6% (other than Jan. 9, 2026) since September of 2022, according to the Federal Reserve Bank of St. Louis.

Graham offered a word of caution.

"Much like the last time, there's always a risk that something happens to prompt a bond market reversal today," he wrote. "If that happens, mortgage lenders could raise rates in the middle of the day."

"But unlike last time, mortgage rates have eased down to current levels in a much more gradual and — dare we say — sustainable way," Graham continued. "After all, (Monday's) improvement is only a moderate 0.05% vs Friday. Back on January 9th, the initial day-over-day jump was more than 0.20%."

As it turned out, there was no such reversal, as the rate remained at 5.99% on Feb. 24, according to Mortgage News Daily.

Declining interest rates and mortgage rates often lead people to tap into their home equity for lines of credit.

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AARP's key guidance on home equity, mortgage rates

If interest rates and mortgage rates continue to decrease, as they have since fall 2025, a rise in people seeking a cash-out refinance or home equity line of credit (HELOC) can be expected. Lower borrowing costs make tapping home equity more attractive.

"A cash-out refinance replaces your current mortgage with a new, larger one. You get the difference in cash, and the new loan often has a fixed rate," wrote GoMortgage. "A HELOC is a second mortgage that allows you to borrow against your equity as needed, typically with a variable rate and interest-only payments during the draw period."

More on mortgages, housing market:

AARP, the nonprofit advocacy group for Americans over 50, offers its perspective on home equity.

"Home equity is a powerful thing," wrote Aly J. Yale for AARP. "And if you’re like many older homeowners, you probably have quite a bit of it."

AARP focused specifically on HELOCs.

"HELOCs are advantageous in that they let you access your home equity over an extended period," wrote AARP. "Instead of giving you a onetime lump sum payment, as other loans do, you get a line of credit. You can then withdraw funds from that credit line for years to come."

"Another distinguishing feature: You can use the funds from a HELOC for any purpose."

AARP identifies smart ways to use a home equity loan

Homeowners often turn to home equity lines of credit (HELOCs) for practical, cost‑effective ways to manage expenses and improve long‑term stability, AARP explains.

Using a HELOC to make your home more accessible

Many older adults choose to age in place as nursing homes and assisted living facilities can cost $25,000 to $117,000 per year, based on a Genworth survey.
Aging in place often requires upgrades such as improved lighting, wider doorways, grab bars, or walk‑in showers.
HELOCs are a flexible way to fund accessibility improvements.
Interest on a HELOC may be tax‑deductible when used to buy, build, or substantially improve a home.

Using a HELOC to repair or improve your house

HELOC funds can cover essential repairs like replacing a roof or fixing a water heater.
Renovations such as kitchen remodels or room additions can increase property value.
Some homeowners use HELOCs to renovate investment properties for flips or long‑term rentals, according to Churchill Mortgage’s Mason Whitehead.

Using a HELOC to pay off higher‑interest debts

HELOCs often carry lower interest rates than credit cards, which averaged 20.97% in November 2025, according to the St. Louis Federal Reserve.
HELOC rates are typically about half those of credit cards.
Experts caution that borrowers should avoid accumulating new credit card debt after paying off old balances.

Using a HELOC to cover medical debt

More than 100 million people in America — a startling 41% of adults — are saddled with medical bills they cannot pay, according to a KFF Health News investigation.
HELOCs can offer a lower‑cost repayment option compared with medical credit cards, which often exceed 25% interest.

Using a HELOC to provide a financial safety net

A HELOC can serve as an emergency buffer for unexpected expenses without accruing interest until funds are drawn.
Compared with reverse mortgages, HELOCs typically involve far lower fees, making them a more affordable way to access home equity.

Dave Ramsey urges resisting the use of a HELOC

For people living paycheck-to-paycheck, even a small setback can throw their whole budget off balance — and the big surprises can feel impossible to absorb.

If a person is a homeowner, they might start wondering whether tapping their home’s equity through a HELOC, could offer some breathing room.

Personal finance author and radio host Dave Ramsey advises against it.

"Stop what you’re doing right now and throw that idea back where it came from," Ramsey wrote. "Taking a loan from your home’s equity is a bad idea."

"Not only are you going into more debt, you’re putting the roof over your head at risk. If you take out that loan and can’t pay it back, your house is on the line. Just don’t do it."

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