Taking An Interest In Rates

By Andrew Sponaugle

What a difference a few quarters can make. After roughly two years of steady interest rate increases by the Fed, markets are now anticipating some level of rate cuts in the near future (perhaps as early as July). Since reaching a ‘somewhat normalized’ level of 3.25% in October 2018, the 10-year Treasury now fetches near 2%, a remarkable decline and level last seen in the fourth quarter of 2016. Accordingly, mortgage rates have come down substantially over the same time period.

Many borrowers who have recently taken on new mortgages likely believed the window of trough interest rates was closed. However, some may have an opportunity to refinance their existing mortgages or consolidate debts at these more-favorable levels.

As of June 20, 2019 the average 30-Year Fixed Rate Mortgage in the U.S. was 3.84%, down from 4.94% in November 2018. Below is a ten-year chart of the average 30-year mortgage rate.

While we can’t predict whether this interest rate dip will be short lived or if we will retest levels seen in 2013 and 2016, it is clear some may have an opportunity to reduce their borrowing costs. We encourage you to reach out to your Advisor with any questions. We will assist in helping to decide whether a refinance/consolidation is in your best financial interest and provide analysis to illustrate how this ‘about face’ in interest rates could affect your cash flows and long-term financial plans. 

Please feel free to use the mortgage calculator HERE to compare your existing mortgage with options available at today’s prevailing rates.

Freddie Mac, 30-Year Fixed Rate Mortgage Average in the United States [MORTGAGE30US], retrieved from FRED, Federal Reserve Bank of St. Louis; https://fred.stlouisfed.org/series/MORTGAGE30US, June 25, 2019.


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