The Brexit Effect
At this point, most people are familiar with the turmoil Brexit has caused in the UK and across Europe. Perhaps less known is the impact the vote is having here in the US, and the opportunity being created for US homeowners.
How Is This An Opportunity?
Before the Brexit vote, interest rates had been creeping upwards. The Fed had increased rates, and was expected to keep raising them all through 2016 (and possibly 2017). But Brexit turmoil has thrown the Fed’s plans in reverse, and now rates are literally setting all-time record lows. It’s unknown how long this will last, but at the moment, a window of opportunity has opened for homeowners to refinance their mortgages to historically low rates.
US Mortgage Rates Are
Setting New Record Lows
How Much Are Homeowners Saving?
Depending on when you took your mortgage, the savings could be very substantial over the life of your loan. Just as recently as early 2014, rates were in the 4.4-4.5% range. Since Brexit, rates have collapsed, and as of the time this article was published, 30-year mortgages were as low as 3.42%.
The savings over the life of a loan are a jaw-dropping $55,000 when moving from 2014 rates (4.48%) to current rates (3.42%).
Acting Before The Window Closes
The effects of Brexit could linger for a while, but markets are already showing signs of stabilizing, and rates could bounce back up pretty quickly. An easy way homeowners can take advantage of the opportunity before it closes is by viewing refinance offers from multiple lenders.
Average homeowners are cutting
their mortgage costs by $55,000
Study after study shows that the best way to get the best rates and terms on any mortgage is to comparison shop. Those who see 5 offers save an average of $24k over the life of a loan compared to those who only go to one lender.1 That’s on top of the savings from the Brexit effect. Given everything going on in the markets, waiting may not be the best move, but seizing on the chance to capitalize on the savings opportunity brought about by Brexit definitely is.