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Real Estate Chart of the Day
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This simple chart from Bankrate.com illustrates an interesting point about mortgage rates and savings rates. Notice how they seem to move in lock-step.
The green line represents the path of the 5-year ARM since 2003.
The blue represents the path of your garden variety, FDIC-insured, 5-year Certificate of Deposit.
If you're a homeowner that likes to limit a home downpayment in favor of buying interest-paying CDs, this chart may help you rest easy the next time you're shopping for a mortgage.
According to the graph, no matter when you choose to lock your rate, you can expect the same spread between your mortgage rate and your CD rate. Ish.
Now, just for comparison. Over the same period of time, if you invested in the non-FDIC-insured Dow Jones Industrial Average instead of CDs, you would have gained 51.13%. That's much higher than any CD was yielding.
Take charge of your funds with personal banking.
Dan Green (NMLS #227607) is an active loan officer with Waterstone Mortgage. Email Dan ator click to get a free, no-obligation rate quote.
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