As difficult as it is to stomach the rough ride the global equity markets are on lately, the silver lining is that mortgage interest rates are once again at historically low levels. What this potentially means for you is another golden opportunity to capitalize on. Here are approximate rates we are seeing for no cost / zero cost mortgages:
- 30-Year Fixed Rate Mortgage: 4.00%
- 20-Year Fixed Rate Mortgage: 3.75%
- 15-Year Fixed Rate Mortgage: 3.50%
- 5- or 7-Year Adjustable Rate Mortgages (ARM): 2.75% to 3.00%
Note that if you are okay with paying closing costs your rates could be about 0.50% lower than those stated above.
Here are some strategies for you could consider with these lower rates:
- Refinancing Your Home: Look to drop your monthly principal and interest payment without increasing how long you have left to pay on your current mortgage. This puts extra dollars in your pocket now that you can put towards your retirement goals.
- Cabin / 2nd Home: If you are looking to add a second home, now could be a great time to consider doing so.
- Retirement Home: Even if you aren't ready to downsize quite yet, it could prove to be a great time to look at purchasing your retirement home and using it as a rental property until you are ready to transition to it.
- Rental Property: If you are looking to diversify yourself from the equity markets and create a cash flow stream for yourself in retirement, now might be a good time to start. That said, you need to be pretty comfortable being a landlord!
If any of these opportunities sound interesting to you, please contact your SWA advisor and we can discuss how one (or more) of the above may fit into your Financial Game Plan. We can also connect you with our mortgage broker contacts (if you don't already have one) that can make this process as quick and painless as possible.