Mortgage Rates Are Really High. Here's Why I Don't Care and I'm Borrowing Anyway

Mortgage rates today are much higher than they were during the heart of the pandemic. In fact, in recent months, rates have been higher than they've been in years. Despite the fact that rates are up so much, I'm still moving forward with buying a house -- and borrowing to do it.

Here's why I don't really care that rates are higher and I'm moving forward with my purchase anyway.

I can refinance my loan later

The biggest reason I don't care that I'm going to pay a higher mortgage interest rate right now is that I know my rate is not necessarily set in stone forever. If rates go down in the future, I'll have the option to refinance. But, if rates go up for a longer period of time, I'll be locked in at my current rate and I won't have to pay more.

Since no one can predict with certainty if rates will go up or down, I'd rather lock in now at the current rates. There's no real risk and all upside if I do this, since I can't go back in time and get today's rates if mortgage loans happen to become more expensive tomorrow. But I can get lower future rates tomorrow if things go well.

I'm buying a house that's well within my budget

Another big reason I don't care that much about high rates is because I'm being very conservative in deciding how much house I can afford. I'm going to purchase a property that is much less expensive than the bank said I could buy based on my income.

Since my mortgage payment won't be a struggle, it's annoying to have to pay a little bit of extra interest, but it won't derail my personal finances or cause me ongoing money stress.

I believe homeownership is a good investment

Finally, the last main reason why I'm eager to buy despite the fact that interest rates are up is because I believe homeownership is still a good investment. I have sold several properties in the past and always made a handsome profit on them. I know that there's no guarantee this will happen forever, but since I'm buying in a market where demand is growing and where remaining properties are somewhat limited, I think the odds are in my favor.

I'd also rather pay a bank interest, while also building equity at the same time by paying principal payments too. I prefer this to spending money on rent and having nothing to show for it in the end.

For all of these reasons, I'm not letting higher interest rates today stop me from purchasing the home I want. Of course, anyone who is thinking about buying a house of their own should consider whether doing so makes financial sense at these rates -- and given your own financial circumstances. You may come to a different decision, but don't assume buying is a bad idea now just because you won't get the record low rates people have enjoyed in recent years.