We've all heard both sides of the argument regarding the question: Should you buy property now, or wait for interest rates to drop?
You should wait for rates to drop because:
Lower Monthly Payments: If interest rates decrease, mortgages become more affordable.
Higher Borrowing Power: Lower interest rates allow lenders to approve larger loan amounts.
Or, you should buy now because:
Less Competition: Higher rates keep some buyers on the sidelines, giving you access to better deals.
Lock in Prices: Home prices typically rise when rates drop—buying now secures today's value.
Start Building Equity: The sooner you own, the sooner you build long-term wealth.
But here’s another way to look at it:
Many buyers wait for rates to drop—say by 0.25%—thinking it will lead to major savings. But let’s put that into perspective:
If you have a $500,000 loan, a 0.25% rate drop saves you just $1,250 per year.
If you wait six months, you might only be saving $625 per year.
Now, consider the opportunity cost—especially in a growing market:
If property prices rise by 5% over six months, a $700,000 home would now cost $735,000.
If prices rise by 10%, that’s an increase of $70,000.
So, the real question is: Are you truly saving by waiting, or are you missing out on potential gains?
Now of course, if you are buying in declining markets. The answer would be the opposite.
So what should you do? Should you buy property now or wait for interest rates to drop?
Well, a good first step is to work out whether the market you want to buy is increasing or decreasing.
Need help? Our team can assist.
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