Why Mortgage Rates Are Still Great Value

While no-one wants to see mortgage rates climb as they have recently, there's a danger of losing sight that they are still providing a fabulous opportunity to lock in a low rate for the life of the home loan.

We have, of course, gotten very used to 30 year fixed interest rates around 3.5% but, as we've always been keen to point out, this was never a sustainable situation and what we are seeing at the moment is arguably a market correction process, as economic confidence begins to gain pace, making bonds, the fortunes of which mortgage rates are closely associated with, a much less attractive safe haven investment.

Now we are seeing 30 year rates moving above 4% and, naturally enough, buyers are concerned about purchasing now and then rates suddenly start to move south again.

Unfortunately no-one can predict with accuracy what is going to happen, one way or another, but it's a very reasonable thought that, from an historic perspective, rates are still offering excellent value.

If we go back 10 years, to when the market was very bouyant and house prices were pretty similar to today, the average 30 year fixed interest rate, according to Freddie Mac, was 6.24%.

And if we go back a couple of years, another very busy time in real estate, we can see that the average 30 year fixed rate in 2014 was 4.17%. Therefore press speculation that the real estate market is in some sort of nose dive just doesn't hold up, if we look back in time.

We have a much healthier economy and jobs market, which is of course going to help to offset these interest rates.

Many congratulations if you bought your home when rates were at rock bottom. If you weren't so fortunate, please don't lose sight of the fact that, at the moment, rates are still great value, if you take a wider view.

As always, we'd be delighted to answer any questions you may have about the current market so don't hesitate to contact us today. We can also put you in touch with the area's top mortgage professionals too.