With Rates at Historic Lows, Should I Refinance?

by | Mar 13, 2020 | Wealth Management

We recently have seen a dramatic shift in interest rates in response to the ongoing global crisis. Over the last month, we have seen the 10-year treasury drop from 1.88% on January 1st to 0.81% on 3/12/20.

This is important to note because historically mortgage rates tend to move with the 10-year treasury. With the recent drop-in rates, it is logical to assume now would be an excellent time to refinance. While that certainly can be the case depending on when you got your mortgage or last refinanced, but unfortunately rates have not come down as you might have suspected. Recently we have seen mortgage rates essentially break up with the 10-year treasury for the time being as they have chosen to not really go any lower. Mortgage rates continued a relentless surge higher. 

Mortgage Rates

The recent decoupling has occurred for a couple of reasons. Mortgages have costs associated with them so that limits how low rates can go, and the mortgage market is currently over-supplied.  Like anything else, a rampant excess of supply puts downward pressure on prices.  When we’re talking about bonds or mortgages, lower prices mean higher rates and it’s really that simple.  The investors that ultimately buy the mortgage debt created by new refinances have been so overwhelmed with the available supply on the market that sellers have desperately lowered prices in order to find buyers.  And again, lower prices on mortgage debt mean higher rates for consumers.

Should you consider a refinance? If you have not refinanced in the last couple of years now may be a good time to investigate a refinance and see if it makes sense. Another reason to consider a refinance is to switch from a 30-year mortgage to a 15-year or 20-year mortgage. This can help save years of payments potentially and the payment may not increase as much as you might think. Please contact us if you would like us to review your current situation or if you would like a referral to someone that can help you with refinancing.

Latest From The Blog


Our Services

Investment Management

Tailor portfolios to your needs and goals.

Retirement Planning

Investing and saving wisely is vital to success in retirement.

Financial Planning

Navigating the complexities of your financial affairs can be simplified.

Tax Management

Help to increase the amount you “take home”.

Estate Planning

Protect your loved ones and make sure your legacy endures.

Executive Compensation Analysis

Simplify the many options and decision points of executive compensation plans.

Education Planning

Confidently plan for your children’s future.

Charitable Giving

Give in a tax-smart, simple way.

*Please Note: Limitations.  The scope of services to be provided depends upon the terms of the engagement, and the specific requests and needs of the client. BFSG does not serve as an attorney, accountant, or insurance agent.  BFSG does not prepare legal documents or tax returns, nor does it sell insurance products.  Please Also Note: Different types of investments involve varying degrees of risk.  Therefore, it should not be assumed that future performance of any specific investment or investment strategy (including the investments and/or investment strategies recommended and/or undertaken by BFSG) or any financial planning or consulting services, will be profitable, equal any historical performance level(s), or prove successful.

Sign Up For Our Newsletters

(They're great, we promise)

Connect With Us

Financial Services Group BBB Business Review