Year end rate dip and what it really changes on a rental

[Frank Pyle]

This week a lot of us are staring at 2026 pro formas and trying to decide if the recent rate softness is enough to loosen the buy box. Freddie Mac posted the 30 year fixed average at 6.15 percent for the week ending December 31, 2025. On a plain Indy rental example, 200k purchase with 25 percent down is a 150k loan. At 6.15 percent the principal and interest is about 914 a month. At 7.00 percent it is about 998. That 84 a month feels meaningful until you remember one insurance renewal can move the same amount or more.

My rule is simple. Treat the rate dip as a bonus, not the underwriting base. I still run my deal at today plus 0.75 percent, add a cushion on taxes and insurance, and fund reserves before calling it cash flowing.

Curious what buffers everyone is baking in for 2026.