Do lower mortgage rates make you flock to buy a home?
Fathers are great because they always make you believe they had it so hard. You know, in the “I had to walk to school barefoot, uphill both ways, with four Orson Welles' on my back” kind of way.
Over the long weekend, my own pops gave me his version of this line in a talk about modern mortgage rates. We talked about how fixed rates are incredibly low, and he claimed, of course, that he was charged about 750 per cent interest on his first mortgage.
An exaggeration? Okay, his actual number may have been a bit lower, but the point remains. Mortgages – they’re pretty much giving them away these days.
Yet how low can they go before consumers start taking advantage of plummeting rates?
In Canada, rates are low, but they’re not that low. In a bid to keep the economy churning along, many major banks have slashed their fixed rates to keep Canucks buying homes.
But my, the same can’t be said about the U.S.
According to CNBC, a 30-year fixed (fixed!) mortgage can be had now for a preposterously low 4.45 per cent, a figure so small it has almost no Canadian comparison. (The longest fixed mortgages CIBC and TD Canada Trust offer, by contrast, are 10 years, at 6.75 per cent.)
Still, the rest of the stinking American economy is simply submarining the wonderful borrowing opportunities for Yankee buyers.
“The refinance index is still almost 30 per cent below last year’s level,” Michael Fratantoni, the Mortgage Bankers Association’s VP, said. “Factors such as negative equity and a weak job market continue to constrain borrowers.”
Have lowered mortgage rates changed the way you think about buying a home? Have you made a move to consider buying with rates down, or has the fear of them inevitably booming again turned you off?
By Jason Buckland, MSN Money