The Federal Reserve Cuts Rates: Here’s How It Could Affect You

Blog Summary: The Federal Reserve has cut interest rates for the first time since 2024. This shift could impact your savings, loan payments, and mortgage options in the months ahead. Here’s what the changes might mean for your financial strategy—and steps you can take now.

On September 17, 2025, the Federal Reserve lowered its key interest rate by 0.25%, bringing it to a target range of 4.00% to 4.25%. This is the first rate cut since December 2024, and with two more expected this year, it likely won’t be the last. 

Rate changes can feel abstract, but they directly affect how much you earn on savings and how much you pay on loans. So, what does this mean for you and your overall financial strategy? Let’s break it down. 

Savings and Certificate of Deposits (CDs) 

When the Fed lowers rates, deposit rates usually follow — but not right away. With additional rate cuts expected, today’s CDs and savings rates may be among the best you’ll see for some time. Locking in today’s rate could help you secure guaranteed returns over a set term. 

Loans and Credit

Lower rates can mean lower borrowing costs. If you have a variable-rate loan like a Home Equity Line of Credit (HELOC) or certain credit cards, you could notice a lower monthly payment. While actual loan rates depend on several factors, the overall trend is supportive for borrowers. 

Mortgages

The Federal Reserve doesn’t directly set mortgage rates, but its policies do play a role. Mortgage rates are influenced by broader market conditions, which means changes can take time to filter through. If you're planning to buy a home or refinance, it’s worth keeping a close eye on rates or connecting with a Mortgage Specialist to explore options that best fit your goals. 

What's Next

The Federal Reserve will meet in October to determine whether additional rate cuts will occur. For savers, that could mean fewer opportunities to secure higher CD rates, while for borrowers it may bring more chances to benefit from lower costs. 

In the meantime, St. Mary’s Bank is here to help you navigate these shifts—whether that means locking in a CD, reviewing your loan options, or planning your next big step with confidence. We’re committed to providing trusted advice and guidance to help you achieve your financial goals.

Key Moves to Consider

• Lock in savings: Open a CD now to capture today’s higher rates before they decline.
• Review your loans: Check if your HELOC, credit card, or variable-rate payments could decrease. 
• Stay mortgage-ready: Planning to buy or refinance? Monitor rates and connect with a Mortgage Specialist to explore your options.