This seemingly simple solution may allow you to stretch your budget now and plan to refinance when mortgage rates drop.

But is "buy now, refinance later" the win-win it describes?

Let's look at this home-buying strategy from all angles and explore the ways in which it may help or hurt homebuyers.

Amidst stubborn inflation, mortgage rates have been climbing, with 30-year fixed-rate mortgages now averaging 6.73 per cent, according to figures recently released by Freddie Mac. Just a year ago, the 30-year fixed rate was 3.85 per cent.

And it's anyone's guess where mortgage rates will go next.

"Predicting mortgage rates in the coming months can be challenging, especially given the current economic climate and the various factors affecting the market," said Joy Aumann, a licensed real estate broker and founder of Luxury SoCal Real Estate in San Diego." While some experts believe that interest rates are likely to remain relatively stable or even decline slightly, others believe that inflationary pressures and monetary policy could push rates higher."

"Marry the house, date the interest rate" - we've heard this approach to home ownership said in a variety of ways, but its purpose is to offer homebuyers the promise of a better, more financially rewarding tomorrow.

The idea is that buyers who borrow from the company now can refinance in the future when interest rates fall.

Don Chambers, a real estate investor in Georgia, says some mortgage lenders are even offering buyers a "one free refinance" (for the life of their loan) promotion after interest rates drop. This would mean the buyer would not have to pay refinancing fees and other costs. For example, the closing costs for refinancing are usually between two and five per cent of the principal amount of the loan.

The aim, says Chambers, is to get buyers the home they want now, in the hope that their monthly payments will ease when interest rates fall.

No one has the ability to predict if and when interest rates will fall. However, in order for the "buy now, finance later" strategy to make financial sense, interest rates need to fall by a certain amount. For some buyers, interest rates may never be low enough for refinancing to actually save them money.

Typically, a 1% drop in interest rates is enough to justify refinancing.

However, Troy Shaffer, founder of Blu Corporate Housing in Phoenix, points out that it may take a 2 per cent drop to actually make a dent in the monthly payment.

Ultimately, it all depends on your personal loan situation.

"For a $100,000 loan, the rate would have to drop much more than a $1 million loan to make refinancing a viable option," says Jennifer Beeston, senior vice president for lending at Guaranteed Rate Mortgage." The type of loan you make may be easy to refinance, or not even possible without an equity gain."

Loans for veterans, for example, are the easiest to refinance. That's because they don't require an appraisal, which can garner additional fees, Beeston says.

"A conventional loan with 3 per cent down is a different story," she explains, "because to refinance, you either need the home to appreciate or have the cash to do the refinance and meet the loan-to-value guidelines." The same is true for jumbo loan options with low down payments. That's why it's important to discuss the future with your lender if you're looking to refinance."

When considering a mortgage refinance, you must also take into account the additional costs associated with refinancing. For example, closing costs include appraisal fees, title services and attorney fees. As mentioned above, buyers can expect to pay between 2% and 5% of the principal amount of the loan as closing costs.

So, even if mortgage rates do drop by 1 to 2 per cent, crunch the numbers and decide if refinancing will save you enough money to make it worthwhile.

History tells us that buying more house than you can afford is a bad idea. So, if you can only swing buying a house because you're banking on refinancing in a few years, take a step back.

"If refinancing is essential, you shouldn't buy a house," says Chambers." Chances are interest rates won't go down for the duration of the loan."

Today's buyers should monitor mortgage rates and consult with a mortgage broker to make an informed decision on the loan that's right for them.