interest rates still low PANIC OVER RISING RATES

Borrowers, Realtors, investors and the markets as a whole all seem to be in a panic over rising interest rates.

The only people who should be worried, however, are “refi-ologists” (businesses and companies who focus only on refinancing).

For starters, higher rates can be a good thing for several reasons, as I discussed in this previous blog: Why Higher Interest Rates Are Good.

ANY RATE UNDER 6% IS A GIFT FROM A HISTORICAL PERSPECTIVE

More importantly, as we repeat often, any rate under 6% is a pure gift when you look at rates from a historical perspective.

HISTORICAL RATE TABLE

This table from Freddie Mac shows average interest rates over the last thirty years.

A few choice selections are set out below. Not only are rates extremely low now, but loans are much, much cheaper as well.

DATE RATE COST
March of 2017 4.2% 0.5 Points
April of 2014 4.34% 0.6 Points
2008 (entire year) 6.03% 0.6 Points
2000 8.05% 1.0 Point
1995 7.93% 1.8 Points
1990 10.13% 2.1 Points
1985 12.43% 2.5 Points

CONCLUSION: The ability to lock in a historically low rate (anything under 6%) is another huge benefit from buying now.

Jay Voorhees
Founder/Broker | JVM Lending
(855) 855-4491 | DRE# 1197176, NMLS# 310167

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