Unless you have been living under a rock for the past (almost) year, you have seen or heard buzz about how low interest rates are right now. We are experiencing an opportunity of a lifetime, borrowers have never quite seen rates. So if you are in a position to take advantage of them, do it! The cost of borrowing is appealing and will directly impact your bottom line.
There is a chance that rates can go lower if the economy stalls, however with Covid-19 vaccines being rolled out across the country, there’s reason to believe that stronger growth will lead to higher rates in the future. This might very well be the lowest rates we will see in our lifetime. Presenting an opportunity of a lifetime for those looking to borrow money in the form of a mortgage. I have personally heard of rates being secured at as low as 1.62% from my clients. And just ahead of this pandemic I renewed my own mortgage at 3% from a Lender A – which was considered very good at the time.
Home prices have risen over 10% on a year over year basis and there are no signs of that slowing down for 2021. However, even if your strategy is waiting out for housing prices to drop it is important to understand how mortgage rates function combined with your bottom line. For discussion’s sake, let’s take a home valued at $700,000 – buying it with 20% as your down payment and one 1.79% five year fixed rate mortgage would cost you less per month than if that same home price fell 5% and mortgage rates reverted back to last year’s levels. So in short, take the sure thing – better interest rate being offered – not to mention, your chances of home prices dropping anytime soon are slim to none!
If you have not already, this is definitely the time to revisit your existing mortgage rates and terms with your mortgage broker and even a more opportune time to enter into a mortgage agreement with a new property.