Getting a House in Rising Interest Rate? – You Must Know This!

Getting a House in Rising Interest Rate


Patrick Iturra Report, 

The mortgage rates are at an all-time high! The average interest rate for a 30-year term is now 4.95%. 

As per mortgage news daily, there are 164 basis points higher compared to the previous year. 

On March 18, the mortgage rate reached 4.72%. This high rise in interest rates has increased the demand for loans. The high mortgage rates have impacted mortgage-backed bonds. 

Many people think this might be the worst time to buy real estate in North America. All real estate property buyers face the problem of short supply and high prices. 

High-interest rates and short supply have made the average mortgage payment 20% higher than the previous year. 

But, should you buy a house at a time? 

As a strategic investment advisor, I am going to share my thoughts. I am going to cover everything about mortgage rates. I will also share whether you should buy houses during this time or not. Let’s get started!

Impact of Mortgage Interest 

The mortgage interest rate has always been a factor to consider for house-buyers. With rising interest rates in present times, buyers are more thoughtful about buying properties these days. 

In our opinion, there’s a need for more guidance on how to get a house with these rising mortgage rates. Because buying houses is never a bad idea, no matter what, it remains the best investment if you have the available budget.

What exactly does the mortgage rate mean?

By definition, a mortgage rate is the rate at which a property lender charges interest. The mortgage rate can be either fixed or variable depending upon what the lender and buyer decide at the time of the contract.

In a fixed mortgage rate, the interest rate is fixed for a specific period, and after that, it goes up periodically, usually on an annual basis.

While a fixed mortgage may seem beneficial with it being “fixed” at the time of contract, it can be expensive when the variable mortgage rate falls and goes below the fixed interest rate.

In variable interest rates, the interest rate keeps fluctuating. It is also known as adjustable rate. It can be beneficial for the buyer when interest rates go down for certain reasons.

Why do mortgage rates go up?

One of the main reasons for mortgage rates to go up is inflation. Mortgage rates have risen in recent months, Although it was already predicted by financial institutions and are still expected to go further on up.

In simpler words, it means that the cost of borrowing money is going up, and hence higher interests have to be paid.

Getting a House in Rising Interest Rate

Should you consider buying a house with a high mortgage rate?

Buying a house is a big decision; it is one financial investment that takes up your lifelong savings and can give back to you if you invest wisely.

In rising inflation times, we recommend you go ahead with a fixed mortgage rate to buy a house; It will benefit you in the short term and bring about longer-term benefits.

How does buying a house still benefit you in the long run? We will take a look at it here!

Building wealth in the long run:

Paying a mortgage is a form of step by step owning your house. It is like taking baby steps towards getting your first significant asset. So even in times when mortgage rates are high, You’re building your wealth in the long run in the form of an asset.

The increased net worth of the house:

As the mortgage rate goes up, the overall value of your house will also rise. The increased net worth of your house means a better outcome for your investment. This is one of the main reasons why even with the inflation rate soaring high, people are intrigued to buy their property. It ensures better future outcomes in terms of financial stability.

Tax reduction:

Once you become the house owner, you are eligible to deduct your property taxes on your federal tax yearly. Decreasing your tax liability is a significant long-term benefit that house-ownership can bring about; it can help you save up money for retirement.

Rising interest rates:

Interest rates have risen in the past, and if you look at the pattern, it will help you make a better decision about whether you should buy a house today or not. Even in the highest interest rate times, the actual amount is still lesser than what you’d pay for rent.

Since inflation does not only affect interest rates, rents also go up as inflation rises. So owning a house is going to benefit you no matter what.

Renting out the house after ownership:

This is what most strategic buyers go with. When house ownership is achieved, the buyer can further go ahead with renting out the house to add up their monthly income. This is one of the reasons that make investing in houses excellent financial security.

Renting a house adds up to your passive income, and in times when interest rates go even higher, people will most likely prefer renting houses; you will then have a fixed asset to make money from.


  3 Tips for buying a house in high-interest rate times:

If you’re going to buy a house in high-interest rate times, you need to have all the required information. Here are three tips to help you make a better decision with your investment.

  • Spend your time researching:

It would help if you did your research before going ahead with the decision. Research your local market, find the best option that suits your budget, and look into the mortgage pre-approval process.

Online search engines and websites can help you with all the pre-work and gain enough knowledge on this. But you need to take out time and make sure you know it all

  • Go for surfacing locations:

This is one thing that most first-time buyers overlook. Emerging locations are best to invest in, according to financial advisors. So instead of going for the central areas, which may cost you double what an outskirt area can offer, go for an emerging location that will benefit you in the long run.

  • Don’t be rigid with your home choice:

When the interest rates are high, be ready to compromise on a few things if they can provide you with bigger benefits. Be open to different choices, lookup options, and be as flexible as possible. It will benefit you in financial terms and ease up your process of house-buying and make it a good experience for you overall.

Summing Up 

Even though interest rates are going up, house-buying is still the best way you can invest your money. 

But you have to do a lot of research here, and I am here to help you with that!  

Over the past 24+ years, I have helped my clients buy the real estate that fits their requirements.  

Whether you are looking for a house or a real estate asset that generates you passive income over time. 

I am here to help you to buy the right real estate that meets your needs! I will use my experience to help you with everything from research, paperwork, and buying the house.

Therefore, If you need any help, you can contact me here! 

I am here to help you!!


Patrick Iturra, Asset Manager at Estate Investments Group

Business development is the ideas, initiatives, and activities that help improve a business. My experience results in your company increasing revenue, growing business expansion, increasing profitability by building strategic partnerships, and making strategic business decisions.


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