Responding to Federal Interest Rate Changes

How recent rate changes can impact your financial outlook.

Article Published October 10, 2025

You may be seeing headlines about interest rate cuts and wondering, what does this mean for me? September marks the first rate cut we’ve seen in 2025, and although the economic environment won’t change overnight, it’s helpful to understand how the ecosystem may balance out over the weeks and months ahead.

Borrowing

Interest rates are highly variable – based on an applicant’s credit score and other criteria – but now is a great time to review your finances and evaluate your borrowing needs. Rate reductions often favor the borrowing environment as it is cheaper to borrow.

Where should I start?

Below are some options to consider.

Mortgage Refinancing

If today’s benchmark rate is lower than your current mortgage, you may want to consider refinancing. A lower interest rate lowers your monthly payments but be sure to factor in a new round of closing costs when running the numbers.

Debt Consolidation

If you have multiple loans, credit cards, or other sources of debt, consolidating can help you manage payments and may provide you an opportunity to lower your interest rates. Look at any outstanding student loans too.

Taking on New Debt

As mentioned before, it is now cheaper to borrow and could be a good time to explore loan options for larger purchases:

Purchasing a new car
Home improvement projects
Small business loans

For questions about refinancing, contact a member of our Home Mortgage Team today. Or visit your local branch to apply for a new loan.

Saving

Although recent rate changes are designed to encourage lending activity, building your savings always makes good financial sense. Placing your money into a CD, savings or money market account comes with the peace of mind of knowing that your money is FDIC-insured up to the allowable limit.

Visit your local Five Star Bank team to discuss your savings options.

The Bottom Line

There are lots of factors at play that will balance out the recent rate change – so respond intentionally based on your financial situation. Not sure where to begin? We have the tools to help get you started!