Should you go long or short on your mortgage? By Rocco Pantalone

Should you go long or short on your mortgage? By Rocco Pantalone

If you’re looking to buy a home, right now is one of the best times to be borrowing money in generations. Following the biggest economic meltdown since the Second World War, central banks around the world have been keeping interest rates close to zero to help heat up the economy.

By low, I mean they’re almost giving it away!

Five year rates on May 31st were as low as 2.74%. That makes ownership affordable for thousands of families who couldn’t have qualified at higher rates.

But the big question is always “where are rates going”? No one wants to find that the affordable mortgage payment they have today has become unmanageable because rates have soared!

The good news is that with weak to moderate growth projected, banks are offering ten year rates at less than a point higher than their five year terms – in May that meant just 3.64%! It’s not hard to see why people would want the security of a guaranteed rate for a decade.

So, the way I see it, today’s low ten year rates make it sensible to go long. You may never see ten year rates quite this low again, so security is the way to go.


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