Mortgage interest rates have been making headlines over the last two years. As interest rates were increased to combat out-of-control inflation, media outlets were quick to assert that higher rates make new real estate acquisitions less desirable.
This view makes it look like interest rates have skyrocketed beyond reason. But watch what happens when we look at a longer period of time. If we expand the graph to show rates since 2000.
This presents a much different narrative, right? When we have more information available, we can see that mortgage interest rates are returning to more normal levels. But because rates have increased so quickly, we feel the pinch more sharply than if they had gradually increased over time.
From this view, it’s clear that the last 10 years have not been representative of normal interest rates. They have been excessively low from a historical perspective. Today’s rates (around 7.5% as of the date of this article) are not only reasonable, but they are a full 10 percentage points below the rate homebuyers were paying in the early 1980s!
How to Get the Lowest Possible Interest Rate
While today’s rates are more in line with what the historical market would consider “normal,” buyers and investors should still take care to find the lowest interest rate possible to avoid unnecessarily high interest expenses.
1.Keep your credit score as high as possible.
3.Consider different loan types.
4.Increase your down payment, if possible.
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