Mortgage Rates Are Easing: 7 Ways to Make Buying a Home More Affordable in Indiana

October 2026 | Central Indiana Real Estate Update

If you've been watching mortgage rates lately, you know they've been challenging for homebuyers.

Maybe you've been thinking about purchasing your first home, moving into something larger, or downsizing. But every time you look at the monthly payment, you wonder whether now is really the right time.

Here's some encouraging news: mortgage borrowing costs recently eased, and buyers are beginning to respond.

According to an October 28, 2026, report from Homes.com News, mortgage applications increased 3.4% in one week—the first weekly increase in nearly eight weeks.

Freddie Mac also reported that the average 30-year fixed mortgage rate declined to 7.32% as of October 22, down from 7.40% the previous week.

While rates remain elevated, this is a reminder that the market is constantly changing.

And here's what I want Central Indiana buyers and sellers to understand:

You don't necessarily have to wait for mortgage rates to fall dramatically to explore your options.

There are several strategies that may help make your next move more affordable.

What Does the Latest Mortgage News Mean?

The Mortgage Bankers Association reported that mortgage applications increased 3.4% during the week ending October 23, 2026.

Purchase applications rose 4% from the previous week, while refinance applications increased 3%.

But it's important to keep the news in perspective. Purchase applications were still 18% below the same week last year.

Another interesting development is the growing interest in adjustable-rate mortgages, or ARMs. These represented 11.3% of mortgage applications, their highest share in more than a year.

What does that tell us?

Some buyers are exploring alternatives to traditional 30-year fixed-rate mortgages in an effort to make monthly payments more manageable.

Let's look at seven strategies worth discussing with a qualified mortgage lender.

1. Ask About a Temporary Mortgage Rate Buydown

One financing strategy buyers may encounter is a temporary rate buydown.

A common example is a 2-1 buydown, which temporarily reduces the interest rate used to calculate the buyer's payment during the first two years.

For example, if the note rate is 7.25%, the payment may be calculated using:

• Year 1: 5.25%

• Year 2: 6.25%

• Year 3 onward: 7.25%

The full note rate remains in place, but funds set aside at closing subsidize the early payments.

A temporary buydown may help buyers ease into a new monthly housing expense, particularly if they expect their income to increase.

However, buyers must generally qualify using the full note rate, and the reduced payment is temporary.

My advice: Make sure the payment after the buydown ends is affordable. Don't build your entire purchasing plan around the hope that you can refinance later.

2. Consider a Permanent Rate Buydown

Another option is purchasing discount points to reduce your mortgage interest rate for the life of the loan.

Generally, one discount point costs 1% of the loan amount, but the interest-rate reduction varies by lender and market conditions.

For example, on a $300,000 mortgage, one point would cost $3,000.

Whether purchasing points makes financial sense depends on the rate reduction offered, the monthly savings and how long you expect to keep the mortgage.

A lender can calculate the break-even period so you can compare the upfront cost against potential long-term savings.

3. Explore Adjustable-Rate Mortgages

Adjustable-rate mortgages are receiving renewed attention.

Unlike a traditional fixed-rate mortgage, an ARM generally offers an initial fixed-rate period before the interest rate becomes adjustable.

For example, a 5/1 or 7/1 ARM may provide a fixed rate for five or seven years, followed by periodic adjustments according to the loan's terms.

Some ARMs offer lower initial rates than comparable fixed-rate loans, potentially reducing the starting monthly payment.

But there's an important tradeoff.

After the initial fixed period, the interest rate and payment may increase.

Before choosing an ARM, ask your lender:

• How long is the initial fixed-rate period?

• What is the starting interest rate?

• How often can the rate adjust?

• What are the adjustment caps?

• What could the maximum payment become?

An ARM may be worth exploring for certain buyers, but it isn't the right solution for everyone.

And refinancing before the adjustable period ends is never guaranteed.

4. Negotiate Seller-Paid Closing Costs or Financing Incentives

This is an option both buyers and sellers should understand.

Depending on the purchase agreement and loan requirements, a seller may agree to contribute toward certain buyer closing costs or financing expenses.

For example, a buyer might negotiate a seller concession that can be used toward eligible closing costs or a mortgage rate buydown.

For sellers, this can sometimes be a useful alternative to simply reducing the asking price.

Imagine you're selling a home in Greenwood or Franklin.

A qualified buyer loves the property but is concerned about the monthly payment.

Instead of immediately lowering your listing price, you might evaluate whether an allowable financing concession could help the buyer complete the purchase while still meeting your financial goals.

The best approach depends on the numbers, lender rules and negotiated terms.

For sellers, the important number isn't just the offer price. It's what you ultimately net from the sale.

5. Compare Multiple Mortgage Lenders

Not every lender offers the same interest rate, fees or loan programs.

Even when two lenders quote similar rates, their closing costs and other charges may differ.

That's why comparing written Loan Estimates can be valuable.

Look beyond the advertised interest rate and review the annual percentage rate (APR), discount points, lender fees, estimated cash to close and projected monthly payment.

Ask lenders to compare the same loan type and assumptions so you're evaluating meaningful differences.

A small rate difference can add up over time.

6. Explore Different Loan Programs and Down Payment Options

Many buyers assume they need 20% down to purchase a home.

That's not always the case.

Depending on eligibility, buyers may have access to conventional low-down-payment options, FHA financing, VA loans, USDA financing or applicable homebuyer assistance programs.

For eligible Indiana buyers, it's also worth asking a participating lender about programs offered through the Indiana Housing and Community Development Authority.

Keep in mind that a smaller down payment may increase the amount borrowed and could involve mortgage insurance or other costs.

The goal isn't simply to find the smallest down payment. It's to identify a financing structure that fits your overall financial situation.

7. Adjust Your Home Search Around Your Monthly Budget

This may be the simplest strategy—and one of the most important.

Instead of starting with the maximum purchase price a lender might approve, begin with a monthly payment you feel comfortable maintaining.

Remember that your housing expense can include more than principal and interest.

Property taxes, homeowners insurance, mortgage insurance, homeowners association dues and ongoing maintenance should also be part of the conversation.

You may discover that a slightly lower purchase price, a different neighborhood or a home with fewer immediate maintenance needs provides more financial flexibility.

In Central Indiana, that could mean exploring options across Greenwood, Whiteland, Franklin, Bargersville, Center Grove and South Indianapolis while keeping your priorities in mind.

What About Refinancing Later?

You've probably heard someone say, "Buy the house now and refinance when rates drop."

Refinancing may become an option if rates decline and you qualify, but it's important to understand that future mortgage rates are unpredictable.

Refinancing also involves qualification requirements and may include closing costs.

The safest approach is to purchase a home you can afford under your original loan terms.

If refinancing becomes financially beneficial later, consider it an opportunity rather than a guarantee.

What Does This Mean for Central Indiana Home Sellers?

If you're thinking about selling your home, mortgage rates matter even if you're not the one applying for a new loan.

Higher borrowing costs can affect how much buyers qualify for and what monthly payment they're comfortable making.

That's why today's sellers should pay attention to three things:

Pricing: Buyers are comparing homes based on both price and affordability. A realistic listing price can help your property compete.

Presentation: A clean, well-maintained, properly marketed home may be more appealing to buyers who are carefully evaluating their expenses.

Negotiation: Understanding seller concessions and financing incentives can create additional options when reviewing offers.

Rather than automatically lowering your asking price, it may be worthwhile to compare the financial effect of different negotiated terms.

Every situation is different, and the best strategy depends on your home, your competition and your goals.

Should You Buy or Sell Now—or Wait?

There's no single answer that works for everyone.

Interest rates matter, but so do your finances, lifestyle, employment, family needs and long-term plans.

If you're comfortable where you are and don't need to move, waiting may be reasonable.

If you're ready for a different home, however, exploring the numbers with a knowledgeable lender and REALTOR® may reveal options you hadn't considered.

You don't have to predict exactly where mortgage rates will go next.

You need a plan that works for your circumstances today.

Let's Talk About Your Next Move in Central Indiana

Whether you're buying your first home, moving up, downsizing or preparing to sell, understanding your options can make a complicated market feel more manageable.

I work with buyers and sellers throughout Greenwood, Center Grove, Franklin, Bargersville, Whiteland, South Indianapolis and Johnson County.

If you're thinking about making a move, I'd be happy to help you explore available homes, understand current market conditions and connect with a qualified mortgage professional who can explain your financing options.

Thinking about selling? We can also discuss your home's potential value, current buyer expectations and whether pricing or seller concessions may make sense for your situation. Here's a link to my home value guide: How Much Is My Home Worth?

Let's create a plan that works for you—not just for the headlines.

Staci von Harten, REALTOR®
Coldwell Banker Stiles
317-645-8121
staciguidesyouhome.com

3455 W. Smith Valley Rd.
Greenwood, IN 46142

Mortgage rates and loan programs change. Financing examples are illustrative, not loan offers or guarantees. Eligibility, terms, concessions and qualification requirements vary. Consult a licensed mortgage professional for advice specific to your circumstances.

Sources

• Homes.com News, Moira Ritter, October 28, 2026, "Mortgage demand rises for first time in nearly eight weeks as borrowing costs ease."

• Mortgage Bankers Association, Weekly Mortgage Applications Survey, October 28, 2026.

• Freddie Mac, Primary Mortgage Market Survey, October 22, 2026.