For the past decade, borrowers have enjoyed historically low mortgage rates. So why are rates suddenly on the rise?
A strong economy tends to force mortgage rates up because of inflationary fears. Rising inflation causes fixed-income investments, such as bonds, to lose value. And that causes their yields to rise. Mortgage rates usually follow long-term bond yields. When yields go up, home loan rates tend to go up, as well.
So while mortgage rates have been slowly rising, they’re still historically low. Borrowers paid well over 8% as recently as 2000.
In a rising mortgage rate environment, borrowers would be wise to act sooner rather than later. And with LMCU’s low mortgage rates and great service, you’ll always get the best value, no matter where the market goes.