If a borrower wanted to take advantage of lower market interest rates, what would they likely consider doing?

Refinancing an existing mortgage is a common strategy for borrowers looking to capitalize on lower market interest rates. When market rates decrease, borrowers can refinance to secure a new mortgage at these lower rates, which can lead to reduced monthly payments, lower overall interest costs, or even the opportunity to pay off the mortgage more quickly.

By refinancing, a borrower replaces their old mortgage with a new one, ideally at a significantly lower interest rate. This can result in substantial savings over the life of the loan, making homeownership more affordable. Additionally, refinancing can allow borrowers to access equity in their homes if they choose to convert to a cash-out refinance, which can be beneficial for funding large expenses.

Other options like taking out a second mortgage, increasing their down payment, or renting their property may not directly utilize lower market interest rates to reduce borrowing costs or achieve mortgage savings. Taking out a second mortgage typically involves incurring additional debt rather than capitalizing on lower interest rates for existing debt. Increasing the down payment might not necessarily relate to interest rate changes and focuses more on getting better loan terms rather than adjusting existing loans. Renting their property does not engage with interest rates at all—it simply shifts ownership dynamics and doesn't take advantage of potentially favorable borrowing conditions.