The UK’s vote to leave the European Union has sent shockwaves through the world’s financial systems. The British pound fell to a 31-year low overnight, and the Dow plummeted 350 points this morning on the news. But one good thing may come of the vote, for prospective homeowners, at least: historically low mortgage rates.
Rates have already hit a near-three-year low this week, with 30-year fixed-rate mortgages hovering around 3.7%, according to the Washington Post. And Britain’s vote to bail on the EU is likely to drive rates even lower – but only temporarily.
“If you’re a borrower, don’t wait to lock your rate, as this opportunity may not last long” Greg McBride, chief financial analyst at Bankrate, told the Post.
While McBride said ripples from the Brexit vote could drive mortgage rates down in the coming weeks, his long-term outlook for rates is unchanged. He still expects rates to rebound from current lows by the end of the year, the Post reported.
Other analysts agree. Mortgage Bankers Association chief economist Michael Fratantoni projected that rates would hit 4% by the end of 2016. He told the Post that while Brexit might disrupt that estimate, he still expects an increase by year’s end.
“At this point, it is unclear whether this will just be a short-term disruption, or whether it will have a longer-term impact,” Fratantoni said. “Our best guess at this point is that the impact on the mortgage market will be to keep mortgage rates lower for longer, likely leading to another pickup in refinance activity.”
There are many ways to refinance a home and millions of U.S. homeowners are potential eligible for lower rates and payments.
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Article Written By Ryan Smith Mortgage Professional America